By David Mwanje
The Bank of Uganda has maintained the Central Bank Rate at 9.75 percent in its November Monetary Policy Statement, signaling confidence in the country’s economic stability ahead of the 2026 general elections.
Governor Michael Atingi-Ego said the economy remains stable, with inflation below the 5 percent target. Headline inflation dropped to 3.4 percent in October from 4.0 percent in September, while core inflation stood at 3.4 percent. He attributed the stability to a stronger shilling, lower fuel prices, and improved coordination between the central bank and the government.
Analysts say maintaining the rate supports growth without triggering inflation. The Bank projects core inflation between 4.0 and 4.5 percent for the 2025/26 financial year. Global factors, including easing commodity prices and expected oil revenue, are expected to support the shilling, though geopolitical risks remain.
Uganda’s GDP growth rose to 6.3 percent in the 2024/25 financial year, up from 6.1 percent the previous year, driven by agriculture, manufacturing, and rising household spending. The Bank projects growth between 6.5 and 7 percent this year and about 8 percent in the medium term.
The Bank also kept the policy band at ±2 percentage points, the rediscount rate at 12.75 percent, and the bank rate at 13.75 percent to ensure adequate liquidity for the private sector.
Lower inflation has eased pressure on households. Food crop inflation dropped to 6.1 percent in October following good harvests, while prices for education and housing remained steady.
The Governor noted that the Bank’s priority is to balance price stability and growth, ensuring that the economy remains resilient as the country heads into the election period.
Uganda’s credit outlook was recently upgraded by an international ratings agency, citing investor confidence in ongoing reforms and major projects in agriculture, oil, and infrastructure. The Bank said this steady policy path will help sustain economic confidence among investors, businesses, and households.
