Uganda Leaves Key Policy Rate at 9.75%

The Bank of Uganda kept its benchmark interest rate steady at 9.75% during its August 2026 meeting, marking the eighth consecutive hold. Policymakers said inflationary pressures remained relatively contained despite higher oil prices. Annual inflation rose to 4% in July, the highest since September 2025, from 3.7% in June, but stayed below the central bank’s 5% medium-term target. Meanwhile, the economy remained resilient, with growth expected to accelerate to 7%-7.5% in FY2026/27, which began in July, from an estimated 6.4% in FY2025/26.

The Bank of Uganda left its benchmark interest rate unchanged at 9.75% on May 14, 2026, marking the seventh consecutive meeting without changes. Policymakers said the current policy stance remains appropriate, even as the Middle East conflict poses inflation risks and clouds the outlook for Uganda’s economy due to uncertainty over its duration and severity. The headline inflation rate rose to 3% in April, up from an over two-year low of 2.8% in March, but stayed below the medium-term target of 5%. The MPC assessed that inflation could rise moderately during the second half of 2026 before stabilising around the medium-term target. Meanwhile, the GDP growth projection for FY2026/27 was kept at 6.5%-7%, with the economy projected to expand by around 8% on stronger exports and investment. The central bank raised the Cash Reserve Requirement (CRR) to 11% from 9.5% in March 2026 to manage liquidity in the banking system and keep inflation expectations anchored.

The Bank of Uganda kept its key interest rate steady at 9.75% on February 9, 2026, marking a sixth straight hold, saying the stance remains appropriate to support growth while keeping inflation near target amid global uncertainty. The central bank noted that Inflation has remained below the medium-term target of 5%, reflecting the impact of prudent monetary policy and fiscal coordination, a stable exchange rate, declining global inflation, and favorable food and energy prices. Headline inflation edged up to 3.2% in January from 3.1% in December and is projected to remain slightly below target in 2026, within a 3.8%-4.3% range, before stabilizing over the medium term. However, the central bank cautioned that risks remain elevated, including stronger domestic demand and geopolitical uncertainty. Growth is projected at 6.5%-7% in FY2025/26, with medium-term growth expected to rise to around 8% on increased public investment and oil-related infrastructure projects.