The Bank of Uganda has raised the Central Bank Rate from 9.75 percent to 12 percent, in a bid to control rising prices, as the Uganda shilling weakens and oil prices go up around the world.
According to BOU Governor, Dr Michael Atingi-Ego, the move is needed to stop inflation before high fuel, transport and food costs spread across the economy.
News indicates that Inflation rose to 4.6 percent in September, up from 4.1 percent in August, partly because food and fuel became more expensive.
This means loans may now become more costly for individuals and businesses, as commercial banks adjust their lending rates.
The Central Bank has also increased the Cash Reserve Requirement for commercial banks from 11 percent to 13.5 percent. This is the share of money that banks must keep with the Central Bank.
And the growth forecast for the 2026/2027 financial year has been lowered to between 6 and 6.5 percent, down from the earlier forecast of 7 to 7.5 percent.