Africa-Press – Uganda. The Bank of Uganda has maintained the Central Bank Rate (CBR) at 9.75%, citing a stable inflation outlook and steady economic growth.
The decision was taken on February 9, 2026, during a meeting of the Monetary Policy Committee (MPC).
On the same day, Bank of Uganda Governor Michael Atingi-Ego said the policy stance remains appropriate to support economic activity while ensuring inflation stays around the medium-term target.
“The MPC kept the Central Bank Rate unchanged at 9.75%,” Atingi-Ego said.
Inflation Still Below Target
The Governor noted that inflation has remained below the medium-term target of five per cent, largely due to prudent monetary policy, a stable exchange rate, and easing global price pressures.
Headline inflation edged up slightly to 3.2% in January 2026, compared to 3.1% in December 2025.
Over the twelve months to January 2026, annual headline inflation averaged 3.5%, while core inflation averaged 3.8%.
Core inflation rose marginally to 3.3% in January from 3.1%, mainly driven by higher services inflation, particularly in passenger air transport.
Food crop inflation, however, moderated to 3.0% in January from 4.4% in December, supported by favourable weather conditions.
Energy, Fuel, and Utilities inflation increased slightly to 1.7% from 1.4%, partly due to modest increases in firewood prices.
Inflation Outlook Revised Downward
The Bank of Uganda said the inflation outlook has been revised slightly downward compared to the November 2025 forecast round.
This revision reflects the effect of modest exchange rate appreciation, declining international oil and food prices, and moderating global commodity prices.
Inflation is projected to remain slightly below the target in 2026, within the range of 3.8% to 4.3%, before gradually returning to the five per cent target over the medium term.
Risks Remain Elevated
Despite the positive outlook, the central bank warned that risks to inflation remain high, both on the upside and downside.
“Risks to the inflation outlook, both upside and downside, remain elevated,” Atingi-Ego said.
Upside risks include stronger domestic demand driven by a more expansionary fiscal policy, as well as a persistently depreciated exchange rate and adverse weather conditions that could raise food prices.
The Bank also highlighted evolving geopolitical tensions that could disrupt global supply chains, dampen growth, and push up commodity prices, especially oil.
On the downside, risks include a sharper-than-projected slowdown in domestic activity, weaker global growth due to trade-related shocks, and a decline in commodity prices.
Economic Growth Expected to Strengthen
Economic activity remained steady during the first three quarters of 2025, supported by strong final consumption expenditure.
The bank projects economic growth in FY2025/26 to remain in the range of 6.5% to 7.0%.
Over the medium term, growth is expected to strengthen further to an average of around eight per cent, supported by public investment, oil-related developments, infrastructure projects, and increased private sector activity.
However, the Bank noted that risks to growth remain tilted to the downside due to heightened global uncertainty.
Policy to Remain Data-Dependent
The MPC said future policy decisions will remain data-dependent, guided by continuous assessment of both domestic and global risks.
Atingi-Ego said the decision aligns with the Bank’s strategy of guiding inflation towards the target over the medium term, while supporting broader economic stability.
“The MPC considers this decision to be consistent with its strategy of guiding inflation towards the target over the medium term,” he said.
The rediscount rate and bank rate remain at 12.75% and 13.75%, respectively.
The next monetary policy review will depend on developments in inflation, growth, and global economic conditions.
