Central Bank holds key rate at 9.75%

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The Bank of Uganda (BOU) left its benchmark lending rate unchanged at 9.75%, saying the current policy stance remains appropriate as inflation stays below target and the economy maintains steady momentum amid global uncertainty.

The BOU said inflation remains contained, with annual headline inflation averaging 3.5% over the 12 months to January 2026 and core inflation averaging 3.8%, both below the bank’s 5% medium term target.

Governor Michael Atingi-Ego said future decisions will remain data-dependent as policymakers balance price stability with the need to support economic activity.

“The economic environment continues to be characterised by heightened uncertainty, necessitating a cautious monetary policy stance,” he said.

Growth averaged 6.3% in the first three quarters of 2025, supported mainly by strong final consumption, including a sharp rise in government spending.

The bank projects economic expansion of 6.5% to 7% in the current financial year, with medium term growth expected to average around 8%, driven by public investment, infrastructure projects, and oil-related developments.