emmanuel tumusiime - mutebile : uganda ’ s primary dealer system remarks by mr emmanuel tumusiime - mutebile, governor of the bank of uganda, at the annual primary dealer award ceremony, kampala, 31 january 2013. * * * distinguished guests chief executive officers of primary dealer banks members of the press ladies and gentlemen good afternoon it is my pleasure and honor to welcome you to this ceremony, at which we will recognize the best performing primary dealer in uganda government securities in 2012. introduced in 2003, the main objective of the primary dealer system is to promote financial markets development and to reduce the costs associated with issuing government securities, by : 1 ) increasing demand for government securities ; 2 ) increasing market efficiency, thereby making government securities easier to buy and sell ; 3 ) encouraging secondary market trading of government securities, and ; 4 ) improving the quality of market information that is shared amongst the participants and with the central bank. by and large, the primary dealer ( pd ) model, that requires all investors in government securities to access the primary market through a pd, is proving successful in achieving its objectives. in particular, the pds have contributed to the growth of the securities market by ensuring high and consistent demand for securities at the primary auctions. over the last five years, most of the primary auctions for government securities have been oversubscribed by large margins, with the auction bid - coverage ratio for both treasury bills and bonds averaging more than 200 percent, which is an indication of the strong demand for government debt by investors. the primary dealers have also contributed to the growth of the secondary market in government securities by quoting effective two - way prices. the ratio of secondary market turnover to the stock of outstanding securities increased from 35 percent in 2011 to 58 percent in 2012, which reflects the increasing buoyancy of the secondary market. despite the progress we have made in developing the government securities market in uganda, we will not rest on our laurels. instead the bank of uganda, in collaboration with all of the stakeholders, is implementing further reforms to enhance market efficiency, transparency and competition. these reforms include the following : i ) the process of upgrading the reuters system to allow real time reporting and viewing of market activity – thereby enhancing market transparency and minimizing price distortions – is in the final stages of implementation. the first stage of the upgrade, involving 10 commercial banks, is expected to be ready by the end of march of this year and the second stage, involving

bank of uganda remarks by prof. emmanuel tumusiime - mutebile governor, bank of uganda uganda banker ’ s association informal dinner piato restaurant 2nd december, 2016 good evening ladies and gentlemen, thank you all for coming here this evening for our informal uba dinner. i spoke last week at the institute of banking and financial services annual banking dinner about the current challenges facing the banking industry. tonight i would like to make a few brief remarks about the current macroeconomic situation and prospects, notably as regards economic growth, the exchange rate and inflation. real economic growth, over the last five years, has averaged about five percent per annum. this is very likely close to the economy ’ s sustainable potential growth rate, given growth of the labour force, capital stock and productivity. in the last fiscal year, which ended in june 2016, real gdp growth was 4. 8 percent, which is slightly below potential, but is far from being a recession as some people have claimed, although i appreciate that trading conditions have been difficult for many businesses. there were factors which probably depressed economic growth in fy 2015 / 16, such as the increase in market interest rates, the exchange rate volatility in the first half of the fiscal year and the election in the third quarter. without an election, and with probably lower interest rates and hopefully less volatile exchange rates ( although that is hard to predict ) i would expect that conditions in the current fiscal year will be more conducive to growth and so i would expect that we will experience a small rise in the real gdp growth, to five percent or even slightly higher. let me now turn to the exchange rate, which has depreciated in recent weeks, after a long period – nearly 11 months – of stability. against the us dollar, the shilling has depreciated by 4. 7 percent since the end of october. however, more than half of that depreciation is attributable to the strengthening of the us dollar against major currencies since the presidential election in the us, which has led to expectations of higher interest rates in that country. my staff calculates an index of the uganda shilling against a weighted basket of uganda ’ s trading partners. this index – called the nominal effective exchange rate index – has depreciated by only 2. 3 percent since the end of october. furthermore, a nominal depreciation of the exchange rate has been necessary to ensure that uganda remains competitive against its trading