Market News
Uganda central bank holds key rate, still monitoring impact of jumbo hike
BY Elias Biryabarema
KAMPALA, Nov 9 (Reuters) – Uganda’s central bank left its benchmark lending rate unchanged at 12% on Monday, saying it wanted to allow sufficient time for the impact of last month’s jumbo rate hike to be felt before adjusting policy.
The Bank of Uganda made the decision despite revising its inflation forecasts higher and lowering its economic growth projections.
“The Monetary Policy Committee judged that the current financial conditions are tight enough, notwithstanding the continuing uncertainty,” Governor Michael Atingi-Ego told a press conference.
October’s 225-basis-point rate hike came at an emergency meeting to address a sharp slide in the shilling.
The currency has since recovered some ground, but it is still more than 11% weaker against the dollar this year.
Headline inflation reached a three-year high of 5.8% year on year last month, driven by oil and food prices.
The central bank now projects core inflation will average 6.0%-6.5% over the next 12 months, higher than its 5% target.
It cut its economic growth forecast for the 2026/27 financial year to 5.5%-6.0%, from 6.0%-6.5% previously.
