KAMPALA, Feb 9 – Uganda’s central bank has once again opted to keep its main lending rate unchanged, underlining a cautious policy stance amid lingering global and domestic uncertainties.
The Bank of Uganda held its Central Bank Rate at 9.75% on Monday, marking the sixth consecutive meeting without a rate adjustment. The policy rate has remained at that level since October 2024.
Governor Michael Atingi-Ego said the current monetary stance remains appropriate to support economic activity while keeping inflation anchored around the bank’s medium-term target of 5%.
Inflation edged slightly higher to 3.2% year on year in January, up from 3.1% in December, but remains well below the central bank’s target. According to Atingi-Ego, inflation is expected to stay modest in 2026, projected within a range of roughly 3.8% to 4.3%, before gradually converging on the 5% target.
On growth, the governor said Uganda’s economy is expected to expand between 6.5% and 7% in the current fiscal year ending in June. Over the medium term, average growth is forecast to accelerate to around 8%, supported by strong public investment and large-scale infrastructure spending linked to the oil sector.
Uganda is preparing to begin commercial crude oil production later this year, a milestone expected to provide an additional boost to investment, exports and overall economic momentum.
While the outlook remains positive, the central bank said uncertainty in the global environment warrants prudence, reinforcing its decision to maintain policy stability for now.
