This week, Bank of Uganda (BoU) co-hosted a three-day BoU-IMF Workshop on Climate Change and Monetary Policy at Serena Kigo, focusing on the pressing question:
Are central banks equipped to tackle the impacts of climate change?
Representatives from over 22 central banks across sub-Saharan Africa gathered to discuss the integration of climate considerations into their monetary policy frameworks.
Deputy Governor Atingi-Ego of the Bank of Uganda (BoU) deliberates on a high-level panel titled “Climate Change and Monetary Policy: ” He emphasized the urgency of the issue, stating, “Some argue central banks should stick to traditional monetary policy objectives.
But when climate change affects food and energy costs, productivity, and financial stability, what aspect of monetary policy remains untouched?”
The workshop creates a platform for sharing insights on climate-related modelling methodologies and data infrastructure development.
“This gathering presents us with a unique opportunity to learn from the diverse experiences of central banks worldwide,” Atingi-Ego remarked.
He highlighted the immediate and far-reaching challenges posed by climate change, noting that existing monetary frameworks, which rely on historical patterns, are quickly becoming obsolete. “As I speak to central banks around the region, I hear a common concern: our models are struggling to capture the new reality of climate-influenced dynamics,” he added.
The discussions underscored the need for a comprehensive approach to revolutionizing monetary policy frameworks. Atingi-Ego stressed that the success of integrating climate considerations into monetary policy would not only affect the effectiveness of central banks but also the economic well-being of millions who rely on their decisions.
