BoU Holds CBR at 12% as Inflation Risks Mount

What the report says

The Bank of Uganda has kept its Central Bank Rate at 12% after an emergency increase in October, maintaining a tight monetary policy stance as inflation risks build. The decision was announced by Governor Michael Atingi-Ego in the November 2026 Monetary Policy Statement on Monday, November 9, and comes as the central bank tries to limit pressure from higher energy costs, a weaker shilling and adverse weather conditions.

BoU also widened the CBR corridor from plus or minus two percentage points to plus or minus three, giving it more room to manage liquidity. The margins on the rediscount and bank rates were adjusted to four and five percentage points above the CBR, lifting those rates to 16% and 17% respectively. The move follows October’s emergency hike, when the benchmark rate rose from 9.75% to 12%.

The bank said inflation has worsened since the previous policy meeting. Headline inflation rose to 5.8% in October from 4.6% in September, while core inflation increased to 4.4% from 3.7%. BoU now expects inflation to stay above its 5% medium-term target, with core inflation projected at 6% to 6.5% and headline inflation at 7.5% to 8% over the next 12 months. The bank said it will keep watching incoming data and the broader inflation outlook as it balances price stability with support for economic stability and growth.