Bank of Uganda holds key lending rate at 12% as inflation climbs
The Bank of Uganda kept its Central Bank Rate at 12% on Monday, a month after an emergency hike from 9.75%. It expects headline inflation of 7.5-8% over the next 12 months, above its 5% target.
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…
Read more 3 min read