The Central Bank has cut its benchmark lending rate on Tuesday to 13 percent from 14 percent, saying there was room to support growth by easing.
Policymakers in the East African nation embarked on an easing cycle in April, and they have since brought down the rate from a peak of 17 percent, that was caused by a surge in prices.
Core inflation dipped to 4.8 percent last month from 5 percent in August, while the economy expanded by 4.8 percent in the financial year ended June, up from an earlier estimate of 4.6 percent, bank governor Emmanuel Tumusiime-Mutebile said.
Growth is expected to be 5.0 percent in this fiscal year, he said, while core inflation would remain around the medium-term target of 5 percent in the next 12 months.
“There is room to support domestic economic growth momentum especially against the ongoing global economic slowdown,” he told a news conference.
Reporting by Elias Biryabarema/Reuters
