The Bank of Uganda has maintained its key interest rate at 9.75%, balancing robust national growth against the inflationary pressures of regional geopolitical instability.
The Bank of Uganda (BOU) kept its key interest rate unchanged on Thursday as it weighs the impact of higher global oil prices triggered by conflict in the Middle East.BOU Governor Michael Atingi-Ego and the Monetary Policy Committee decided to leave the Central Bank Rate (CBR) at 9.75%, saying the current setting still fits the economic picture even with fresh risks from energy costs.“Monetary policy decisions will remain firmly data dependent and guided by the
evolving outlook and balance of risks,” Atingi-Ego said.Inflation has stayed comfortably below the 5% target over the past year, averaging around 3.4% headline and 3.5% core, but April brought a small uptick to 3.0% for both as fuel and utility prices started feeding through.The shilling has already lost about 5.4% against the dollar between February and April, reflecting pressures from the same global events.. Uganda, as a fuel importer, feels the pinch directly, while the
country also stands to gain eventually from its own oil exports once production ramps up.Atingi-Ego, who took over as governor in early 2025, has steered policy through a period of solid growth and low inflation.. The economy expanded at an average 6.7% pace in the first half of the current financial year, driven by gains across the agriculture industry and services.Officials still see full-year growth for FY2025/26 landing between 6.5% and 7.0%, with medium-term prospects
around 8% supported by stronger exports and business investment.According to BOU, growth faces more downside threats from prolonged high energy costs that could squeeze household spending and business investment.
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