emmanuel tumusiime - mutebile : developing a vibrant capital market in uganda speech by mr emmanuel tumusiime - mutebile, governor of the bank of uganda, at the official listing of bonus shares at the uganda securities exchange, kampala, 7 june 2013. * * * the global chairman & managing director, bank of baroda & guest of honour – mr. s. s. mundra governing council members, uganda securities exchange, chief executive officer, capital markets authority, chairman and board of directors, bank of baroda ( u ) ltd, dignitaries and invited guests in your respective capacities, ladies and gentlemen, good morning it gives me great pleasure to be the chief guest on the occasion of the official listing of the bonus shares of the bank of baroda ( uganda ) ltd. i would like to commend the board and the management of bank of baroda for their foresight in issuing bonus shares to facilitate the increase in the bank ’ s paid up capital, as well as for their continued good stewardship of the bank. the bank of uganda raised the minimum paid up capital requirement for banks, from shs 4 billion in 2011 to shs 25 billion. the motivation for the increase was both to strengthen the capital base of banks and to bring our minimum paid up capital requirement closer to those of our partners in the east african community. most of the banks operating in uganda already had a capital base, in terms of total shareholders ’ funds, which exceeded shs 25 billion prior to the statutory increase in paid up capital coming into effect ( which for banks already operating in uganda, was march of this year ). for some banks, however, it was necessary to restructure their capital by transferring funds from their retained reserves to their paid up capital. issuing bonus shares to shareholders is one way of implementing such a transfer. it also provides a mechanism for rewarding the existing shareholders out of the profits generated by the bank. this is actually the second time in the last two years that the bank of baroda has issued bonus shares to its shareholders, thereby increasing its paid up capital. the bank of baroda has made a prominent contribution to the development of a vibrant capital market in uganda. it was the first financial institution to be listed on the uganda securities exchange ( use ). since it was first listed, the value of the bank ’ s shares has grown remarkably. the bank of baroda is one of the oldest banks in this country, and has survived and

uncertainties through policy coordination among countries at international forums including the g20. now then, what are the challenges facing the korean economy? the growth outlook for the korean economy this year is clouded by the existence of several downside risks, among them the political unrest in the middle east and north africa, and resultant rise in international oil prices, and domestically, the damage caused by foot - andmouth disease. on the other hand, there are also upside risks, such as the strengthening of the economic recoveries in the us and other major advanced economies. and as the effects of these downside and upside risks are likely to be of similar magnitude, we at the bank of korea expect the korean economy to achieve favorable growth at the originally - forecast level of around 4. 5 % this year, with balanced contributions from exports and domestic demand. employment has exhibited a trend of recovery since 2010, led by the private sector, with the unemployment rate holding steady at the mid - 3 % level, while a solid trend of surplus has been maintained in the current account, albeit at a declining ratio to gdp. for this year as well, we foresee outcomes similar to those of last year both in employment and in the current account balance. given such prospects, i believe price stability to thus now be the greatest challenge facing the korean economy. amid the build - up in demand pressures from our swift recovery from the global crisis and economic upswing, consumer price inflation, after recording 4. 1 % in january, marked 4. 5 % in february, exceeding the upper bound of the bank of korea ’ s medium - term inflation target. this is due mainly to three factors. first are the run - ups in oil and other international commodity prices, and the surge in prices of agricultural, livestock and fisheries products owing mostly to the abnormal cold wave experienced this winter and to the outbreak of footand - mouth disease. second is the demand - side pressure, as measured by the positive output gap. and the third factor is the rising inflation expectations. roughly speaking, the supply - side factors account for half of the price inflation that we are seeing. bis central bankers ’ speeches in the coming months, consumer price inflation may remain elevated at a high level for some time. having said that, i expect inflationary pressures to be concentrated more in the first half of this year than in the second half, and particularly those stemming from supply - side factors like international commodity prices to ease in the second half relative to the first. given