Bank of Uganda keeps key rate at 12 per cent as inflation rises
The central bank held its benchmark rate after an October increase, warning that a weaker shilling and fuel costs could push prices higher still.
The Bank of Uganda kept its Central Bank Rate at 12 per cent on Monday, November 9, 2026, after a special meeting in October lifted it from 9.75 per cent. Governor Michael Atingi-Ego described the tightening as temporary, meant to secure medium-term stability.
Inflation climbed to 5.8 per cent in October, up from 4.6 per cent in September and above the bank's 5 per cent medium-term target. Food prices were up 7.6 per cent, and the bank now expects headline inflation to average 7.5 to 8 per cent over the next year. The shilling averaged 4,170 to the dollar in October, 20.4 per cent weaker than a year earlier.
The bank raised the cash reserve requirement to 13.5 per cent and cut its growth forecast for the 2026/27 financial year to 5.5 to 6 per cent. Borrowers are under pressure, with private sector credit growing 19.8 per cent in the three months to September, and dollar loans averaging 7.7 per cent interest.
Why it mattersBorrowers with dollar loans face heavier repayment costs as the shilling weakens, according to the central bank's monetary report.