The Bank of Uganda (BoU) has raised its benchmark Central Bank Rate (CBR) from 9.75% to 12% following a special meeting on October 14, 2026, as a weakening shilling, rising oil prices and global economic uncertainty increase the risk of inflation in the country.
The 2.25-percentage-point increase is aimed at containing inflationary pressures as higher international fuel prices and currency depreciation raise the cost of imports and put pressure on household and business spending.
The decision marks the central bank’s first change to the policy rate since October 2024.
In its October monetary policy statement, the bank linked the worsening economic outlook to escalating conflict in the Middle East, which has been a contributing factor to higher oil prices, shipping costs and exchange rate volatility.
It also noted that rising interest rates in advanced economies have made foreign investments more attractive, limiting capital inflows into Uganda.
Uganda’s annual headline inflation rose to 4.6% in September 2026, up from 4.1% in August. Core inflation, which excludes volatile food and energy prices, has also increased, reaching 3.7% from 3% in May.
The 2.25-percentage-point increase is aimed at containing inflationary pressures as higher international fuel prices and currency depreciation raise the cost of imports and put pressure on household and business spending.
The decision marks the central bank’s first change to the policy rate since October 2024.
In its October monetary policy statement, the bank linked the worsening economic outlook to escalating conflict in the Middle East, which has contributed to higher oil prices, shipping costs and exchange rate volatility.
It also noted that rising interest rates in advanced economies have made foreign investments more attractive, limiting capital inflows into Uganda.
Uganda’s annual headline inflation rose to 4.6% in September 2026, up from 4.1% in August. Core inflation, which excludes volatile food and energy prices, has also increased, reaching 3.7% from 3% in May.
