From Reuters

Uganda’s central bank held its key lending rate at 11.50 percent on Tuesday, but said a decline in foreign aid was a source of uncertainty for the economy.

The Ugandan shilling has come under pressure since some Western countries and funding agencies announced aid cuts last week in response to President Yoweri Museveni’s signing of an anti-homosexuality law.

Bank of Uganda Governor Emmanuel Tumusiime-Mutebile said the bank would continue to intervene in the foreign exchange market to stem volatility as it had sufficient reserves to do so, amounting to about $3 billion.

“The magnitude and timing of possible declines in foreign aid are also a source of uncertainty for the balance of payments and the economy,” Tumusiime-Mutebile told a news conference.

“We only intervene when we think it’s necessary and the bank has adequate foreign reserves to intervene in our markets whenever necessary.”

Written by George Obulutsa | Read more at Reuters