Business
Central Bank holds benchmark lending rate at 9.75%
The Monetary Policy Committee, which met on August 13, 2026, said it needed more clarity on where inflation is headed before making any changes to the rate.
Michael Atingi-Ego, Governor at BOU. (File photo)
By: Ali Twaha, Journalist @New Vision
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The Bank of Uganda (BOU) has kept its benchmark lending rate unchanged at 9.75%, as policymakers watch to see whether rising fuel and food prices will spread through the wider economy.
The Monetary Policy Committee, which met on August 13, 2026, said it needed more clarity on where inflation is headed before making any changes to the rate.
Energy and fuel costs have been climbing for months, driven by a weaker Shilling and higher petroleum prices, but the central bank says this has not yet triggered a broader rise in prices across the economy.
Energy and fuel costs have been climbing for months, driven by a weaker Shilling and higher petroleum prices, but the central bank says this has not yet triggered a broader rise in prices across the economy.
“Given the elevated risk of energy-related price shocks feeding through to domestic inflation expectations, a cautious monetary policy stance remains appropriate. Against this backdrop, the MPC maintained the CBR at 9.75% to preserve price stability, while allowing time to assess global developments and their implications for the inflation outlook,” Michael Atingi-Ego, Governor at BOU, said.
Uganda’s annual headline inflation rose to 4.0% in July 2026, up from 3.7% in June. The main driver was Energy, Fuel and Utilities inflation, which jumped to 14.9% from 11.9%, largely because of higher petroleum prices combined with a weaker Shilling. Food crop inflation also picked up, rising to 1.6% from 0.0% in June.
“The current inflation data does not show broader price pressures spreading through the economy as a result of the increase in oil prices. Indeed, annual core inflation held steady at 3.4% in July 2026, while services inflation eased slightly, from 4.9% to 4.8%,” he said.
Uganda’s annual headline inflation rose to 4.0% in July 2026, up from 3.7% in June. The main driver was Energy, Fuel and Utilities inflation, which jumped to 14.9% from 11.9%, largely because of higher petroleum prices combined with a weaker Shilling. Food crop inflation also picked up, rising to 1.6% from 0.0% in June.
“The current inflation data does not show broader price pressures spreading through the economy as a result of the increase in oil prices. Indeed, annual core inflation held steady at 3.4% in July 2026, while services inflation eased slightly, from 4.9% to 4.8%,” he said.