The Bank of Uganda (BoU) kept its Central Bank Rate (CBR) at 12% on Monday. It is sticking with tight monetary policy as rising energy prices, a weaker shilling and bad weather threaten to push prices higher. Governor Michael Atingi-Ego announced the decision as he read the November 2026 Monetary Policy Statement, Nile Post reported.
The Monetary Policy Committee also widened the CBR corridor from plus or minus two percentage points to three. Atingi-Ego said the change gives the bank more room to manage liquidity. "The Bank adjusted the margins on the CBR for the rediscount and bank rates to four and five percentage points, respectively, pushing the rediscount rate to 16% and the bank rate to 17%," he said.
The hold follows an emergency move in October. The central bank then raised the CBR from 9.75% to 12% to fight inflation. It also sought to soften the blow from higher energy prices and a falling shilling. Inflation has kept rising since. Headline inflation hit 5.8% in October, up from 4.6% in September. Core inflation rose to 4.4% from 3.7%.
Atingi-Ego said the inflation outlook had worsened since the last meeting, so the bank raised its forecasts. Over the next 12 months, core inflation is expected to average 6-6.5%. Headline inflation is projected at 7.5-8%, above the 5% medium-term target.
BoU warned that a further fall in the shilling, high global oil prices and bad weather could add to price pressure. For ordinary Ugandans, a weaker shilling makes imported goods, fuel and production inputs dearer. Higher energy costs can then feed into transport, manufacturing and food prices.
The governor said tight policy aims to secure medium-term economic stability. He called that stability the bedrock of the government's Tenfold Growth Strategy. He said future decisions will depend on incoming data, the inflation outlook and the balance of risks.
According to Nile Post, events in the Middle East remain key for Uganda because of their effect on oil prices. The outlet noted cautious optimism that diplomatic changes could ease pressure on energy markets. But it said oil prices will depend on the conflict, supply and demand. Sustained oil price increases would add to the effect of the weaker shilling. That could keep inflation high for households and businesses.