Uganda’s central bank lowered its benchmark interest rate to 9.75% from 10%, marking its first consecutive rate cut in four years as inflation pressures ease.
The move follows a similar reduction in August, signaling confidence in the improved inflation outlook.
Deputy Governor Michael Atingi-Ego stated that risks to inflation are balanced but emphasized a cautious monetary policy stance.
The bank aims to maintain inflation control while supporting Uganda’s socio-economic transformation.
Annual inflation slowed to 3% in September, while core inflation dropped to 3.7%, both below the central bank’s 5% target.
The Bank of Uganda is maintaining a cautious approach to monetary easing, with back-to-back rate cuts signaling confidence in inflation control.
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A stable Ugandan shilling, buoyed by strong coffee export earnings and moderate import growth, has also contributed to subdued inflation.
The shilling has appreciated nearly 4% against the dollar since June, further aided by the US Federal Reserve’s recent rate easing.
