The Bank of Uganda has increased the Central Bank Rate (CBR) by one percentage point to 10% as part of measures to contain the rising inflation.
The decision has been made today during a Monetary Policy Committee meeting convened by the Central Bank Deputy Governor, Michael Atingi-Ego.
According to a statement released by the deputy governor, the outlook of inflation is highly uncertain as several risks lie ahead.
However, the Central Bank projects headline inflation to rise in the coming months and in 2023 before declining back to around 4% in 2024.
Atingi-Ego explains that rising inflation is largely influenced by the impact of adverse weather conditions on food production, a global recession resulting from the fight against inflation and escalation of geopolitical tensions and stronger monetary policy tightening by major central banks further weaken the exchange rate.
The deputy governor has meanwhile expressed the central bank’s commitment to rein in on inflation and undertake necessary measures to restore inflation to the target of 5% in the medium term.