bank of uganda opening remarks by : prof. emmanuel tumusiime - mutebile governor, bank of uganda, at the hosting of the parliament of ghana finance committee members at a benchmarking exercise to bank of uganda, board room, level 7, plot 37 / 45 kampala road, uganda thursday, september 27, 2018 honourable members of parliament, parliament of uganda ; honourable members of parliament, parliament of ghana ; technical staff from both parliaments ; ladies and gentlemen, good morning, i would like to welcome you all to the bank of uganda. it is a privilege to host our brothers and sisters from ghana, a country which holds a special status in africa on account of the pioneering role it has played in many different fields - political, economic and social – and in particular for its pan africanist approach to foreign policy which has been an inspiration throughout the continent. ghana ’ s pioneering role is also of relevance in the field of central banking. the bank of ghana was one of the first central banks in subsaharan africa to introduce an inflation targeting monetary policy framework in the mid 2000s, at a time when virtually all other central banks in the region were either implementing monetary targets or targeting the exchange rate. ghana ’ s experience with inflation targeting was of great value to the bank of uganda and influenced its decision to adopt a similar monetary policy framework in 2011 ; a framework which has proved very successful in controlling inflation. given that our guests are all legislators, i would like to say a few words about the relationship between parliament and the central bank, as this relationship is complex and not always well understood. the 1995 ugandan constitution confers independence on the bank of uganda. specifically the constitution states that : “ in performing its functions, the bank of uganda shall conform to this constitution but shall not be subject to the direction or control of any person or authority. ” what does this mean in practice? in essence it means that the bank of uganda is free to implement its core policy responsibilities, which are monetary policy and bank regulation, without political interference. for example, the government cannot give instructions to the bank of uganda with regard to setting the policy interest rate. there is a very strong economic rationale for central bank independence, because independence gives monetary policy and bank regulation more credibility with the private sector, which in turn improves incentives for the private sector to act in ways which are consistent with low inflation and financial stability. this is why central bank independence has become an important characteristic of modern central banking around

emmanuel tumusiime - mutebile : bank of uganda ’ s position on the exchange rate statement by prof emmanuel tumusiime - mutebile, governor of the bank of uganda, kampala, 19 january 2011. * * * i think that it is now necessary to state clearly bank of uganda ’ s position on the exchange rate. we believe that the current level of the uganda shilling / dollar exchange rate is undervalued. moreover, further depreciation will be counterproductive for macroeconomic management, especially because of the impact this will have on the prices of imported goods and hence on consumer price inflation. consequently, the bank of uganda intends to adopt a more aggressive stance to support the exchange rate. we sold dollars yesterday to the interbank market. we are prepared to intervene again if necessary. we are complementing this by raising interest rates in the interbank market and on repo instruments. of course open market exchange rates are difficult to control and no central bank can guarantee to move the exchange rate in the direction it wants. however, i want to stress that we are not indifferent to further exchange rate depreciation and that for the immediate future, curbing such depreciation will be a priority of the bank of uganda ’ s macroeconomic management. bis central bankers ’ speeches