BoU said the move was intended to support liquidity management and maintain stability in the financial sector. The decision comes amid concerns about rising prices of goods and services, which continue to affect household budgets.
Borrowers in Uganda are unlikely to get immediate relief from high interest rates after the Bank of Uganda (BoU) maintained its Central Bank Rate (CBR) at 12% for November 2026.
The decision means the benchmark used by commercial banks to guide lending rates will remain unchanged, potentially keeping the cost of borrowing high for individuals and businesses seeking loans.
In its monetary policy statement issued on November 9, 2026, the Bank of Uganda said the decision was necessary to contain rising inflationary pressures caused by higher global energy prices, exchange rate depreciation and unfavourable weather conditions.
For an ordinary Ugandan planning to borrow money to pay school fees, build a house, expand a business or meet household expenses, the unchanged rate means there is no immediate policy-driven reduction in the cost of credit.
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Business owners who depend on bank loans to buy stock, purchase equipment or expand their operations may also continue facing relatively expensive financing.
The CBR is the rate at which the central bank guides the cost of money in the economy. Commercial banks consider it, alongside other factors, when setting interest rates on loans and savings.
Although maintaining the rate does not automatically mean all commercial banks will keep their lending rates unchanged, borrowers should not expect an immediate reduction simply because of the latest monetary policy announcement.
The central bank also widened the CBR corridor from plus or minus two percentage points to plus or minus three percentage points. It adjusted the margins for the rediscount and bank rates to four and five percentage points, respectively, bringing them to 16% and 17%.
BoU said the move was intended to support liquidity management and maintain stability in the financial sector.
The decision comes amid concerns about rising prices of goods and services, which continue to affect household budgets.
The bank reported that headline inflation stood at 3.8% in October, while core inflation, which excludes some volatile items, rose to 4.4% from 3.7% in September.
This means households could continue feeling pressure from the cost of essential goods and services, although the actual prices consumers pay will depend on several factors.
BoU warned that inflation could rise further due to the depreciation of the shilling, higher international commodity prices and weather conditions that could affect food production.
The central bank now expects core inflation to average between 6.0% and 6.5%, while headline inflation could reach between 7.5% and 8.0% over the next 12 months.
However, favourable weather conditions and improved food supplies could help moderate some of the price pressures.
On economic growth, BoU lowered its forecast for the 2026/2027 financial year to between 5.5% and 6.0%, down from the earlier projection of 6.0% to 6.5%.
The bank attributed the revision to tighter financial conditions, exchange rate pressures and the delayed effects of drought experienced earlier in the year.
Despite the short-term challenges, BoU expects economic growth to strengthen over the medium term, with the economy projected to expand by an average of 8% annually over the next five years.
The MPC said keeping the CBR at 12% would give previous monetary policy measures time to take effect while allowing the bank to monitor inflation and other economic developments.
The statement was signed by BoU Governor Michael Atingi-Ego.