The Bank of Uganda’s August 2026 Monetary Policy Report reviews the Monetary Policy Committee’s decision to maintain the Central Bank Rate at 9.75 percent. The bank lowered its 12-month inflation forecasts, projecting core inflation at 4.0 percent to 4.5 percent and headline inflation at 5.5 percent to 6.0 percent, as international oil prices eased from their May peak. Headline inflation rose to 4.0 percent in July from 3.7 percent in June, while core inflation remained at 3.4 percent, indicating that energy and food price pressures had not spread broadly through the economy. Economic growth is estimated at 6.4 percent in fiscal 2025-26 and projected at 7.0 percent to 7.5 percent in fiscal 2026-27, rising to about 8.0 percent over the medium term. Credit conditions improved as the average shilling lending rate fell to 17.73 percent in the three months through June, private sector credit growth reached 16.1 percent in June and the nonperforming loan ratio declined to 2.67 percent. Inflation risks remain tilted to the upside because of potential energy price shocks, geopolitical tensions, adverse weather and stronger demand. Growth risks are weighted to the downside, including weaker global demand, trade disruption and higher production costs, supporting the bank’s decision to retain a cautious policy stance while assessing incoming data.
2026-09-01Bank of Uganda
Bank of Uganda holds policy rate at 9.75 percent, lowers inflation forecasts
The Bank of Uganda maintained the Central Bank Rate at 9.75 percent and lowered its 12-month inflation forecasts, with core inflation projected at 4.0 percent to 4.5 percent and headline inflation at 5.5 percent to 6.0 percent. Growth is forecast to accelerate from an estimated 6.4 percent in fiscal 2025-26 to 7.0 percent to 7.5 percent in fiscal 2026-27. Energy prices, geopolitical tensions and adverse weather remain key upside risks to inflation.