Uganda’s central bank kept its key lending rate unchanged at 9.75% on Thursday, citing contained inflation risks from higher oil prices.
The decision, announced in the Bank of Uganda’s Monetary Policy Statement, marks the eighth consecutive hold at this level.
Headline inflation rose to 4.0% year-on-year in July from 3.7% in June, driven mainly by energy, fuel and utilities costs that climbed to 14.9%.
Core inflation remained steady at 3.4%, while services inflation eased slightly to 4.8%.
“The current inflation data does not show a broader price pressure spreading through the economy as a result of the increase in the oil prices,” Governor Michael Atingi-Ego told a press conference.
The Bank of Uganda targets core inflation of 5% over the medium term. Forecasts for core inflation over the next 12 months were revised to 4.0–4.5%.
Uganda’s economy grew an estimated 6.4% in the fiscal year ending June 2026. Officials project growth of 7.0–7.5% in the current fiscal year, supported by private credit, investment and upcoming oil production.
The rate has remained at 9.75% since October 2024 as inflation stayed below target. Risks remain tilted to the upside from geopolitical tensions, oil price volatility and weather effects on food supplies.
Future policy moves will stay data-dependent, the bank said.
