- Decision
- Maintain
- Rate change
- 0 bps
- central bank rate
- 9.75%
The Monetary Policy Committee of the Bank of Uganda maintained the Central Bank Rate (CBR) at 9.75% in August 2026, judging a cautious stance appropriate as energy-related price shocks could broaden despite an improved inflation outlook and resilient growth. The CBR has remained at 9.75% since August 2025. The CBR band remains at ±2 percentage points, with the rediscount and bank rates at 12.75% and 13.75%, respectively. Headline inflation rose to 4.0% in July, driven mainly by energy and food prices, while core inflation held at 3.4%, showing no broader spread of price pressures. The central bank projects core inflation to average 4.0-4.5% and headline inflation 5.5-6.0% over the next 12 months, compared with a 5% medium-term target. Economic growth is estimated at 6.4% in FY2025/26 and is projected to accelerate to 7.0-7.5% in FY2026/27, supported partly by strengthening private-sector credit and improved asset quality. The balance of payments recorded a USD 2.4 billion surplus in the 12 months to June, producing a similar increase in foreign exchange reserves, while the shilling stabilised after earlier depreciation. Volatile oil prices, geopolitical tensions, supply-chain disruption and protectionism remain key global risks. Future decisions will be data-dependent, with greater clarity on inflation’s path and drivers needed before further policy action.
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.