Kenya, May 25 -- Stiff monetary policy moves, stringent financial compliance ratios, and low customer deposit growth have pushed Ugandan lenders into choosing fixed deposits. This development promises higher returns for local fund managers and higher customer borrowing costs.

The Central Bank Rate (CBR) was raised to 10 percent in February, amid sharp depreciation of the shilling against the dollar, prompting an increase in commercial bank lending rates, interest rates pegged to treasury bills and bonds, plus interbank lending rates.

Steep declines witnessed in the value of the shilling saw the unit hit a record low of 3,900 to the dollar in the first quarter of 2024. Currency traders blame the depreciation pressures on capital flight b...