- Decision
- Maintain
- Rate change
- 0 bps
- central bank rate
- 12%
The Bank of Uganda’s Monetary Policy Committee (MPC) held the Central Bank Rate (CBR) at 12% for November 2026, judging financial conditions sufficiently tight despite a higher inflation outlook and weakening growth, following October’s 225-basis-point increase from 9.75%. The central bank widened the CBR band to ±3 from ±2 percentage points to support tight shilling liquidity and raised the rediscount and bank rates to 16% and 17%, respectively. Core inflation is projected to average 6.0–6.5% over the next 12 months, above the medium-term target of 5%, with risks skewed to the upside. Economic growth is forecast at 5.5–6.0% in FY2026/27, revised down because of tighter financial conditions, shilling depreciation and elevated energy prices. A worsening current account deficit could put further pressure on the shilling and domestic prices. The Middle East conflict has raised global energy prices, while renewed global inflation could prompt further monetary tightening in advanced economies and worsen external financial conditions. The MPC said the rate hold allows previous policy measures time to work through the economy, with future decisions guided by incoming data, the evolving inflation outlook and the balance of risks.
Rate evolution
From August 2025 to August 2026, the Bank of Uganda kept the Central Bank Rate (CBR) 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 and favourable food and energy prices, while the inflation outlook shifted to broadly balanced in November 2025 as forecasts were revised lower, before the Bank again flagged elevated two-sided risks in February 2026, including possible demand pressures from a positive output gap and more expansionary fiscal policy.
In May 2026, however, the Bank held the CBR 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.
On 14 October 2026, the Bank raised the CBR by 225 basis points to 12.0% to contain inflation pressures from the escalating Middle East conflict, higher oil prices and shilling depreciation, limit second-round effects and anchor expectations around its 5% medium-term core inflation target, with core inflation projected to average 5.5-6.0% over the next 12 months. On 9 November 2026, it held the CBR at 12.0%, judging financial conditions tight enough and allowing previous measures time to take effect despite raising its 12-month core inflation forecast to 6.0-6.5% on higher oil prices and risks of further shilling weakness, while cutting its FY2026/27 growth forecast to 5.5-6.0%.