Manufacturers urge Bank of Uganda to hold rates ahead of Monday decision
The Bank of Uganda announces its policy rate decision on Monday, less than a month after a 225 basis point hike to 12%. Manufacturers want a pause, but one market analyst expects another increase as inflation hits 5.8%.
Uganda's business community wants the central bank to stop raising borrowing costs. The Bank of Uganda (BoU) announces its next monetary policy decision on Monday, November 9, the Daily Monitor reported. Analysts are split on whether it will hold or hike. At a special meeting on October 14, the bank raised the Central Bank Rate from 9.75% to 12%. It was the first change since October 2024 and the biggest single rise since October 2011, according to the Monitor. The move also took the rate to its highest level since December 2016. The bank blamed the escalating Middle East conflict, higher oil prices and heavy pressure on the shilling. Inflation has kept climbing since then. Headline inflation hit 5.8% in October, its highest in more than three years. It stood at 4.6% in September and 4.1% in August. The bank now expects headline inflation to average 7% to 7.5% over the next 12 months, above its 5% target. It has also cut its 2026/27 growth forecast to between 6% and 6.5%, down from 7% to 7.5%. Commercial banks are now passing on the October hike. Absa raised its shilling prime rate…
Read more 3 min read