- Decision
- Maintain
- Rate change
- 0 bps
- central bank rate
- 9.75%
The Bank of Uganda’s Monetary Policy Committee on 14 May 2026 left the Central Bank Rate (CBR) unchanged at 9.75 percent, judging the existing stance sufficient to contain inflation that, while still below the 5 percent medium-term target at 3.0 percent headline and core in April, faces upward pressure from the Middle East conflict-driven surge in global oil prices. The CBR has been steady at 9.75 percent since at least May 2025. The policy band remains ±2 percentage points, keeping the rediscount and bank rates at 12.75 percent and 13.75 percent, respectively; the cash reserve requirement was raised in March to 11 percent from 9.5 percent to tighten banking-system liquidity. Core inflation is now projected at 5.0–5.3 percent over the next 12 months before easing to the 5 percent target, while real GDP grew 6.7 percent in the first half of FY2025/26 and is forecast at 6.5–7.0 percent for the full fiscal year amid resilient private-sector activity. The Uganda shilling has depreciated about 5.4 percent against major currencies between February and April, reflecting oil-related external pressures. Globally, the bank highlights elevated geopolitical risks and higher energy prices, with potential for further tightening by advanced-economy central banks. The committee reaffirmed its data-dependent approach and said it stands ready to adjust policy if risks to inflation or growth materialise.
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.