Bank of Uganda Keeps Central Bank Rate at 12% Amid Inflation Concerns

The Bank of Uganda has decided to keep the Central Bank Rate (CBR) at 12 percent, as announced by Governor Michael Atingi-Ego in the November 2026 Monetary Policy Statement. This decision was made despite rising inflationary pressures and growing economic uncertainties. The Monetary Policy Committee also adjusted the CBR band from ±2 to ±3 percentage points to support tight shilling liquidity.

Uganda's headline inflation increased to 5.8 percent in October, up from 4.6 percent in September, while core inflation rose to 4.4 percent. The Bank attributed the increase largely to energy and weather-related shocks, alongside depreciation of the Uganda shilling and higher international oil prices. These factors have contributed to the current inflationary pressures in the country.

The Bank projects that over the next 12 months, headline inflation will average between 7.5 and 8 percent, while core inflation is expected to range between 6 and 6.5 percent. This forecast indicates that inflation will continue to be a challenge for the economy in the coming months. The Bank is closely monitoring inflation trends to guide its future monetary policy decisions.

Uganda's economic growth forecast for the 2026/27 financial year has been revised downwards to between 5.5 and 6 percent, from the earlier projection of 6 to 6.5 percent. The revision reflects tighter financial conditions, geopolitical uncertainties, elevated global energy prices, and the effects of earlier drought conditions. This downward revision highlights the challenges facing the country's economy.

Despite the current economic challenges, the Bank projects stronger medium-term growth, averaging about 8 percent over the next five years. This growth is expected to be supported by private investment, exports, and developments in the oil sector. The Bank remains optimistic about the country's long-term economic prospects.

The Bank's future monetary policy decisions will be guided by inflation trends, economic performance, and developments in the global economy. The Bank is committed to maintaining price stability and supporting economic growth. The Monetary Policy Committee will continue to monitor the economic situation and make adjustments as necessary.

The decision to maintain the CBR at 12 percent is aimed at balancing the need to control inflation with the need to support economic growth. The Bank's actions will continue to be guided by its mandate to promote price stability and economic development in Uganda. The country's economic prospects remain positive, with a focus on achieving sustainable growth and stability.

Key points

• The Bank of Uganda maintains the Central Bank Rate at 12 percent amid rising inflation and slower economic growth.
• Inflation is projected to average between 7.5 and 8 percent over the next 12 months.
• Uganda's economic growth forecast for 2026/27 has been revised downwards to between 5.5 and 6 percent.