The Bank of Uganda has published FAQs explaining its November 2026 decision to hold the Central Bank Rate (CBR) at 12% and adjust liquidity facilities to reinforce its tight monetary policy stance. Holding the rate allows October's increase from 9.75% to work through the economy as inflation pressures rise and the growth outlook weakens.
The interest rate corridor around the CBR widened from ±2 to ±3 percentage points, setting the Standard Lending Facility rate at 15% and the Standard Deposit Facility rate at 9%. These changes increase banks' cost of borrowing from the central bank and reduce returns on deposits placed with it, encouraging more active liquidity management through the interbank market. The rediscount rate increased to 16% and the Bank Rate to 17%, respectively 4 and 5 percentage points above the CBR.
Annual headline inflation rose from 4.6% in September to 5.8% in October, while core inflation increased from 3.7% to 4.4%. Higher global oil prices, shilling depreciation and unfavorable weather are driving price pressures. Over the next 12 months, core inflation is projected to average 6.0%–6.5%, above the 5% medium-term target, while headline inflation is expected to average 7.5%–8.0%. Inflation risks remain tilted upward. Growth for fiscal year 2026/27 is projected at 5.5%–6.0%, down from the earlier forecast of 6.0%–6.5%, reflecting tighter financial conditions, currency depreciation, elevated energy costs and global uncertainty.