Bank of Uganda Delivers Massive Rate Hike

2026-10-14 11:11 By Luisa Carvalho 1 min. read

The Bank of Uganda raised its benchmark interest rate by a massive 225 basis points to 12% at an emergency meeting on October 14, 2026, following an extended pause in monetary tightening.

The move pushed borrowing costs to their highest level since 2017, as the central bank sought to curb the shilling’s sharp depreciation.

Governor Michael Atingi-Ego said the continued depreciation could fuel inflationary pressures, warranting a tighter monetary policy stance.

Uganda's inflation rose for a sixth straight month to 4.6% in September, reaching its highest level since June 2023.

The shilling has lost around 12% this year, hitting successive record lows against the US dollar this month, amid strong demand for foreign currency from oil importers and foreign investors selling government bonds.

The central bank had proposed using Uganda’s $6 billion in foreign reserves to ease dollar shortages, but President Yoweri Museveni opposed the move over concerns about its impact on importers.



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Bank of Uganda Delivers Massive Rate Hike
The Bank of Uganda raised its benchmark interest rate by a massive 225 basis points to 12% at an emergency meeting on October 14, 2026, following an extended pause in monetary tightening. The move pushed borrowing costs to their highest level since 2017, as the central bank sought to curb the shilling’s sharp depreciation. Governor Michael Atingi-Ego said the continued depreciation could fuel inflationary pressures, warranting a tighter monetary policy stance. Uganda's inflation rose for a sixth straight month to 4.6% in September, reaching its highest level since June 2023. The shilling has lost around 12% this year, hitting successive record lows against the US dollar this month, amid strong demand for foreign currency from oil importers and foreign investors selling government bonds. The central bank had proposed using Uganda’s $6 billion in foreign reserves to ease dollar shortages, but President Yoweri Museveni opposed the move over concerns about its impact on importers.
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