Bank of Uganda Keeps Policy Rate at 9.75% as Inflation Stays Moderate

The Bank of Uganda has retained its benchmark Central Bank Rate (CBR) at 9.75%, maintaining its accommodative monetary stance amid a stable inflation environment.

The decision followed the latest monetary policy review and reflects the central bank’s assessment that existing policy settings remain adequate to support economic activity while keeping inflation within target levels.

The policy rate has remained unchanged since October 2024, underscoring continuity in monetary management as price pressures stay contained.

Recent data shows that inflation remains well below the bank’s medium-term target. Headline inflation edged up slightly to 3.2 per cent in January, compared with 3.1 per cent in December, but remains comfortably under the 5 per cent core inflation threshold.

The central bank noted that underlying inflationary pressures remain subdued, supported by relatively stable food prices and improved supply conditions across key sectors.

According to the bank, the current inflation outlook provides sufficient room to prioritise growth-supportive policies without jeopardising price stability.

However, it cautioned that global uncertainties—including commodity price volatility and geopolitical risks—continue to pose potential threats to the inflation trajectory.

The bank said prudent monetary management has helped anchor inflation expectations and limit external pass-through pressures, prompting a cautious but steady approach to policy decisions.