The Bank of Uganda has kept its Central Bank Rate (CBR) unchanged at 9.75%, a decision Governor Michael Atingi-Ego says is meant to balance inflation control with economic expansion.
“This rate strikes a balance between controlling inflation and fostering growth,” Atingi-Ego told reporters after the Monetary Policy Committee meeting on August 12, 2025. The rediscount rate remains at 12.75% and the bank rate at 13.75%.
The central bank’s latest Monetary Policy Statement paints a picture of resilience despite global headwinds.
Uganda’s real GDP grew by an estimated 6.3% in the 2024/25 financial year, up from 6.1% the year before, helped by export growth, infrastructure investment, and stable prices.
Growth in 2025/26 is projected between 6.0% and 6.5%, supported by higher agricultural output and investments in the extractive sector.
“Our tenfold growth strategy is gaining traction, supported by targeted initiatives and resilient domestic activity,” Atingi-Ego noted.
But he also pointed to risks ranging from global supply chain disruptions to tighter financing conditions, even as easing geopolitical tensions and increased infrastructure spending could push growth higher.
Inflation, meanwhile, remains comfortably below the 5% target. Annual headline and core inflation averaged 3.4% and 3.9%, respectively, in the 2024/25 financial year.
In July 2025, the figures stood at 3.8% and 4.1%, helped by lower food and transport costs, a firm shilling, and favorable global commodity prices. Core inflation in 2025/26 is expected to average between 4.5% and 4.8%, slightly below earlier forecasts.
“Upside pressures like exchange rate depreciation or adverse weather could push inflation higher, but we remain vigilant,” Atingi-Ego cautioned, adding that weak global demand or further drops in oil prices could push inflation down.
For businesses, the stable CBR offers predictability in borrowing costs, particularly in manufacturing, services, and export sectors.
Traders stand to benefit from shilling stability and strong external demand, although falling commodity prices could erode margins.
For ordinary Ugandans, July’s low inflation means steady prices for essentials such as food and transport, safeguarding purchasing power.
The central bank’s upbeat growth forecast hints at potential job creation, especially in agriculture and infrastructure. But adverse weather or global economic shocks could still disrupt supply chains and raise costs.
“This synergy has anchored investor confidence, allowing Uganda to weather a volatile global environment,” Atingi-Ego said, crediting coordination between monetary and fiscal policy for the current stability.
With the economic “engine humming steadily,” as Atingi-Ego put it, the Bank of Uganda is betting that a steady hand on interest rates will keep the country’s growth momentum intact while keeping a close eye on the global uncertainties ahead.
