Uganda central bank holds key lending rate at 11.50 pct

KAMPALA, March 4 Tue Mar 4, 2014 4:25am EST

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KAMPALA, March 4 (Reuters) - Uganda's central bank held its key lending rate at 11.50 percent on Tuesday, but said there was potential risk from higher inflation especially from the shilling's depreciation and high food prices.

Bank of Uganda Governor Emmanuel Tumusiime-Mutebile told a news conference that a decline in foreign aid was a source of uncertainty to the country's economy.

The shilling is under pressure since last week when some Western countries and funding agencies announced aid cuts in response to President Yoweri Museveni's signing of an anti-homosexuality bill. (Reporting by Elias Biryabarema; Writing by George Obulutsa; Editing by James Macharia)

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