- Decision
- Maintain
- Rate change
- 0 bps
- central bank rate
- 9.75%
The Bank of Uganda Monetary Policy Committee on 12 August 2025 left the Central Bank Rate (CBR) unchanged at 9.75%, judging the existing stance adequate to anchor inflation near the 5 percent target while safeguarding growth amid persistent global trade frictions and geopolitical tensions. The rate has been steady at 9.75 percent since February 2025. The CBR band remains at +2 percentage points, keeping the rediscount and bank rates at 12.75 percent and 13.75 percent, respectively. Headline and core inflation in July eased to 3.8 percent and 4.1 percent y/y, after averaging 3.4 percent and 3.9 percent over the past year; core inflation is now projected at 4.5–4.8 percent in FY 2025/26 before converging on the 5 percent goal, helped by a stable exchange rate and lower global oil prices. Real GDP is estimated to have expanded by 6.3 percent in FY 2024/25 and is seen advancing by 6.0–6.5 percent in FY 2025/26, supported by robust exports, infrastructure investment and higher agricultural and extractive-sector output. The committee flagged a firmer shilling, subdued external demand and softer oil prices as downside risks, offset by potential inflationary pressures from currency depreciation, costlier imports and increased government spending, and it stressed that any future policy changes will hinge on incoming data and risk assessments.
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.