Uganda: Central Banks Intensify Efforts to Integrate Climate Considerations Into Monetary Policy.

As the effects of climate change become more pronounced, central banks around the world are intensifying their efforts to integrate climate considerations into their monetary policy frameworks.

The growing recognition that climate-related risks can significantly affect financial and price stability has led to a shift in how central banks approach economic stability.

This shift is being driven by the urgent need to mitigate risks posed by climate change while ensuring sustainable economic growth.

This morning, Dr. Michael Atingi-Ego, Deputy Governor of the Bank of Uganda (BoU), participated in a high-level panel discussion in Kampala titled “Climate Change and Monetary Policy: A Conversation with Central Bankers.

” The session was part of the BoU-IMF workshop on climate change modelling for monetary policymaking, a key initiative aimed at equipping central banks with the tools to navigate the complex intersection of climate change and economic policy.

Dr. Atingi-Ego highlighted the importance of learning from the diverse experiences of central banks worldwide, noting that while their core mandate remains unchanged, their approach is evolving to address the realities of a rapidly changing world.

He emphasised, “This gathering presents us with a unique opportunity to learn from the diverse experiences of central banks worldwide.

Our mandate is not changing, we are simply adapting our tools to fulfil it in a changing world.”

The workshop, which brings together participants from over 25 countries, serves as a platform for exchanging practical experiences on topics such as climate change modelling, data infrastructure development, and policy implementation.

These shared insights will be invaluable for shaping Uganda’s approach to integrating climate considerations into its monetary policy, a critical step in ensuring the country’s financial stability in the face of climate-related risks.

For central banks like BoU, adapting their policy frameworks to account for climate change is essential for managing the long-term risks to the economy.

From agriculture to infrastructure, the effects of climate change can disrupt economic activity, influence inflation, and alter investment patterns.

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By incorporating climate risks into monetary policy, central banks can help mitigate these impacts and safeguard financial systems.

Uganda, with its reliance on climate-sensitive sectors such as agriculture, stands to gain significantly from these global insights.

By aligning its monetary policy with climate change considerations, the country can enhance its economic resilience and contribute to the broader goal of sustainable development, ensuring that both economic stability and environmental sustainability are prioritised in policymaking.

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