- Decision
- Maintain
- Rate change
- 0 bps
- central bank rate
- 9.75%
The Bank of Uganda’s Monetary Policy Committee left the Central Bank Rate (CBR) unchanged at 9.75 percent at its 6 February 2025 review, citing contained but rising inflation and resilient economic activity amid elevated external risks. Overnight money-market rates will continue to be guided within a two-percentage-point corridor around the CBR. Annual headline inflation in January inched up to 3.6 percent and core inflation to 4.2 percent, yet the central bank still sees average core inflation at 4–5 percent in 2025 before converging to target. Real GDP grew by 6.7 percent in the first quarter of FY 2024/25, and output is projected to expand by 6.0–6.5 percent for the full year, though private-sector credit growth remains subdued. Deeper interbank FX trading has supported shilling stability, but the MPC warns that a stronger US dollar, geopolitical tensions, supply-chain disruptions and adverse weather pose upside risks to prices and downside risks to growth. The committee signalled that any future rate adjustments will be data-dependent and guided by its evolving risk assessment.
Rate evolution
From August 2025 to August 2026, the Bank of Uganda kept the Central Bank Rate unchanged at 9.75%, maintaining a cautious hold as inflation stayed modest and growth remained resilient. Early decisions stressed subdued headline and core inflation, helped by prudent monetary policy, a stable or stronger exchange rate, easing global inflation and favourable food and energy prices, while balancing that against external uncertainty from trade dynamics and geopolitics and domestic upside risks from exchange-rate pressures, public spending and adverse weather. By November 2025, the inflation outlook had shifted to broadly balanced as forecasts were revised lower, but in February 2026 the Bank again stressed elevated two-sided risks, adding possible demand pressures from a positive output gap and more expansionary fiscal policy, while still seeing growth strengthen even as risks to activity stayed tilted to the downside.
In May 2026, however, the Bank held the Central Bank Rate at 9.75% while judging that the Middle East conflict, higher oil prices and shilling depreciation had clouded the outlook, pushed the near-term core inflation projection up to 5.0-5.3%, tilted inflation risks to the upside and warranted an agile, data-dependent stance with readiness to act as needed, alongside a higher Cash Reserve Requirement to contain liquidity. In August, it again held the rate at 9.75% as lower international oil prices and a stabilising shilling improved the outlook and lowered the 12-month core inflation forecast to 4.0-4.5%, though risks remained tilted to the upside and concerns that higher food, fuel and other input costs could broaden inflation supported continued caution.