Uganda Central Bank Takes Action Against Inflation, Raises Key Rate

In a move to address mounting inflation risks, Uganda’s central bank has opted to increase its key lending rate by 25 basis points to 10.25%. This decision, announced by Deputy Governor Michael Atingi-Ego during a virtual press conference on Monday, underscores the bank’s commitment to stabilizing inflation around its medium-term target of 5%.

This latest rate hike marks the second consecutive increase by the bank, following a 50-basis-point raise in March. The primary objective behind these successive adjustments is to counteract the depreciation of the local shilling currency and curb inflationary pressures.

“Considering the persistent upside risks to inflation,” Deputy Governor Atingi-Ego emphasized, “the MPC (Monetary Policy Committee) deemed it necessary to tighten monetary policy further.”

The decision reflects the central bank’s proactive stance in safeguarding economic stability and ensuring that inflation remains within manageable levels.

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