- Decision
- Maintain
- Rate change
- 0 bps
- central bank rate
- 9.75%
The Monetary Policy Committee of the Bank of Uganda kept the Central Bank Rate unchanged at 9.75 % on 9 February 2026, judging the current stance sufficient to support activity while guiding inflation back to the 5 % medium-term target as global uncertainty persists and the price outlook has been slightly revised lower. The rate has been held at 9.75 % since at least February 2025. The implementation framework is unchanged, with a ±2 pp corridor around the CBR and corresponding rediscount and bank rates of 12.75 % and 13.75 %. Headline inflation inched up to 3.2 % and core inflation to 3.3 % in January, both below target, and the bank now projects 2026 inflation at 3.8–4.3 % before stabilising around 5 %. GDP expanded by an average 6.3 % in the first three quarters of 2025, and growth is forecast at 6.5–7.0 % in FY 2025/26, buoyed by strong consumption and forthcoming oil-related and infrastructure investment, though the bank notes a positive output gap and downside risks. A modest exchange-rate appreciation alongside lower international oil and food prices is damping imported inflation, while heightened geopolitical tensions remain a key external risk. The committee reiterated that future policy decisions will be data-dependent.
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.