Image note: Illustrative graphic representing African financial markets, not a photograph of the Bank of Uganda or the policy meeting.
The Bank of Uganda raised its benchmark Central Bank Rate from 9.75% to 12% on 14 October, a 225-basis-point increase as policymakers responded to pressure on the shilling, rising fuel prices and higher inflation risks.
The decision followed a special Monetary Policy Committee meeting. The central bank warned that escalating conflict in the Middle East had pushed up international oil prices and increased shipping, transport and insurance costs, adding pressure to Uganda’s external accounts and domestic prices.
The rate increase is intended to contain inflation and support currency stability, but it also risks raising borrowing costs for households and businesses as commercial lenders adjust their own pricing.
What businesses should watch
Companies reliant on imported fuel, equipment or raw materials face a combination of exchange-rate and cost pressures. Higher interest rates may also make working-capital finance and investment loans more expensive. The effects will depend on how quickly inflation expectations and currency pressures respond to the tightening.
The central bank’s decision therefore presents a trade-off: stabilising prices and the currency while avoiding an excessive squeeze on credit and economic activity.
Sources: Uganda Broadcasting Corporation, 14 October 2026; Nairametrics, 14 October 2026.