Uganda: Central bank governors discuss deficits

Kampala.  Africa central bank governors have met to discuss fiscal deficits, government borrowing from central banks, high inflationary rates and beefing up of foreign exchange reserve level. “The meeting will see us reviewing the status of the implementation of the African monetary policies which include an evaluation of the progress made in meeting the economic convergence criteria,” Mr Emmanuel Tumusiime Mutebile the Bank of Uganda, said during the Association of African Central Bank Governors for Eastern - Africa sub region meeting in Kampala.  He added: “The meeting also seeks to find ways of controlling governments’ borrowing from central banks, inflation and keeping marginal foreign exchange.” With a view of having a monetary union before coming up with a common central bank, African sub regions are working on macroeconomic convergence criteria so as to realise a strong monetary union, which is currently the hottest issue in various Africa regional blocs in the spirit of regional integration. However, Mr Mutebile who is also the currently chairperson of the Association of African Central Banks Eastern - African sub region, said progress in the region towards the economic convergence criteria has been mixed. “The supply shocks which have buffeted the region’s economies have pushed up inflation and weakened the balance of payments,” he said.Mr Mutebile stressed that countries in the region are facing challenges arising from the volatility in the foreign exchange markets and the steep rises in food prices. The Kampala meeting was held in preparation for the assembly of governors of AACB in Lilongwe, Malawi next month. (Daily monitor)