Nampewo, Dorothy2022-01-052022-01-052020https://nru.uncst.go.ug/xmlui/handle/123456789/1107This study determines the existence and drivers of the asymmetrical response of lending rates to policy rate changes in Uganda’s banking sector. Uganda’s banking system seems to be faced with sticky adjustments of lending rates following changes in policy rates. Whereas interbank money-market rates have tended to track the evolution of the policy rate, bank lending rates have been stickier, only responding partially to changes in the policy rate, with lags. These lag periods appear to be longer when the policy rate is reduced than when it is raised, which has created challenges for monetary policy implementation. The analysis is based on bank-level data covering 17 commercial banks for the period 2009–2017.en