The Bank of Uganda left its benchmark central bank rate at 9.75% on Thursday, marking the eighth consecutive meeting without a change. The decision aligns with expectations as policymakers balance inflationary risks against economic growth concerns.
In a statement, the central bank noted that inflation has moderated but remains elevated above the medium-term target of 5%. Recent declines in global commodity prices, particularly for oil and food, have provided some relief, though domestic pressures persist. The Bank of Uganda cited risks from potential supply chain disruptions and volatile global financial conditions as key considerations in its policy stance.
The central bank’s decision follows a period of heightened monetary tightening globally, with many central banks maintaining or raising rates to combat inflation. Uganda’s rate has been held steady since the last adjustment in June 2023, when it was raised by 100 basis points to 9.75%. The Bank of Uganda has emphasized the need for a cautious approach to avoid stifling economic recovery while ensuring price stability.
Analysts expect the central bank to maintain its current policy until clearer signs of sustained inflation easing emerge. The next policy review is scheduled for December, where further adjustments may be considered based on evolving economic conditions.
