The Bank of Uganda (BoU) has decided to maintain its Central Bank Rate (CBR) at 9.75%, citing ongoing global economic uncertainties and elevated risks to the inflation outlook.

Inflation Outlook and Economic Stability

BoU Governor Michael Atingi-Ego stated that the current policy stance is appropriate for maintaining inflation targets and supporting economic growth. As of April 2025, Uganda's headline and core inflation rates edged up to 3.5% and 3.9%, respectively.

The inflation outlook remains broadly aligned with earlier forecasts, with core inflation expected to average between 4.5% and 5.0% in the 2025/26 financial year, converging to the 5% target over the medium term.

Risks to the Economic Outlook

The BoU highlighted several upside risks to the inflation outlook, including stronger domestic demand, geopolitical tensions, trade restrictions, adverse weather affecting food production, and exchange rate depreciation. Conversely, downside risks encompass exchange rate appreciation, weaker demand, improved agricultural output, declining global commodity and energy prices, and slower growth in major economies. 

Given these factors, the BoU emphasized the need for a cautious approach to monetary policy to ensure price stability and support sustainable economic growth.