The Bank of Uganda’s Monetary Policy Committee (MPC) today announced its decision to maintain the Central Bank Rate (CBR) at 9.75%. This decision comes amidst rising inflation, primarily driven by an increase in services inflation, particularly in passenger transport.
While headline inflation rose to 3.6% in January 2025 from 3.3% in December 2024, the MPC noted that near-term inflation appears well-contained. However, the committee recognized the increased uncertainty surrounding the global economic outlook, with potential risks stemming from geopolitical conflicts, extreme weather events, and a strong US dollar.
The MPC acknowledged the continued strength of the Ugandan economy, with real GDP growth estimated at 6.7% in the first quarter of 2024/25, driven by a significant recovery in industrial activity. However, the committee also recognized potential downside risks to growth, including adverse weather conditions, tight financing conditions, and potential disruptions to global trade.
The MPC emphasized that the current CBR level is deemed appropriate to control inflation while supporting economic growth. The CBR bands remained at +/-2 percentage points, with the rediscount and bank rates at 12.75% and 13.75%, respectively.
The MPC will continue to closely monitor domestic and global economic developments and adjust monetary policy as necessary to ensure price stability and support sustainable economic growth.