Michael Atingi-Ego, the Governor, Bank of UgandaThe Bank of Uganda (BoU) has maintained the Central Bank Rate (CBR), a key benchmark rate for commercial banks, at 9.75% in November 2025.The Central Bank says this reflects confidence in the improving domestic economic environment while remaining vigilant to persistent risks in the global economy.“This decision underscores the BoU’s commitment to safeguarding price stability and containing inflation while supporting sustainable economic growth in a dynamic macroeconomic environment,” Michael Atingi-Ego, the Governor, Bank of Uganda, said.In the Monetary Policy Statement for November 2025, BoU says inflation has remained subdued, supported by prudent monetary policy, a stronger exchange rate, and favourable energy prices. Over the past 12 months, annual headline inflation averaged 3.6%, while core inflation averaged 3.9%, both remaining below the medium-term target of 5%.In October 2025, year-on-year headline inflation fell to 3.4% from 4.0% in September 2025, driven by declines in both core and food crops inflation. Core inflation eased to 3.4% from 4.0%, reflecting lower inflation in education, accommodation services, and other goods.Food crops inflation moderated to 6.1% from 7.4%, supported by favourable weather conditions. In contrast, Energy, Fuel, and Utilities (EFU) inflation rose marginally to 0.1% from -0.1%, due to slight increases in the prices of liquid fuels.BoU says the inflation outlook has been revised slightly downward relative to the August 2025 forecast. Core inflation is now projected to range between 4.0% and 4.5%, compared to 4.5% and 4.8% in the previous forecast for FY2025/26, which remains below the 5% target over the next 12 months. This revision reflects a more appreciated exchange rate and a supportive external environment amid easing global inflation.The overall outlook remains broadly balanced, shaped by both upside and downside risks.“Upside risks include heightened geopolitical tensions that could disrupt global energy and food supply chains, adverse weather conditions that constrain agricultural output, and exchange rate pressures from weaker capital inflows or delayed oil revenues. Additionally, stronger domestic demand, particularly from public investment, could intensify core inflation pressures,” Atingi-Ego said.He added: “Downside risks include continued capital inflows related to oil sector developments, favourable weather conditions enhancing food supply, and easing global monetary conditions that could lower imported inflation. Overall, the inflation outlook remains balanced, with core inflation expected to remain close to the medium-term target.”The Central Bank says GDP growth reached 6.3% in FY2024/25, up from 6.1% in the previous year, supported by improvements in agricultural and industrial activities. On the expenditure side, growth was driven by increased consumption and investment. High-frequency indicators point to continued confidence in the economic environment in FY2025/26.The economy is projected to expand by 6.5–7.0% in FY2025/26, rising to an average of around 8% in the medium term.“This reflects Uganda’s sustained economic resilience, underpinned by a slight improvement in global growth, prudent monetary policy and targeted fiscal measures that have preserved macroeconomic stability and reinforced investor confidence. Growth is further supported by the ongoing implementation of the Tenfold Growth Strategy which is unlocking opportunities in agriculture, infrastructure, and extractive industries,” said Atingi-Ego, adding: “Indeed, a major global credit rating agency recently revised its outlook for Uganda to positive from stable because the economy continues to exhibit stronger momentum compared to her peers.”Despite the favourable outlook, several challenges, especially from the global scene, persist.BoU says rising trade barriers, tight global financial conditions, weakened business and consumer confidence, and elevated policy uncertainty could weigh on global and domestic growth.Nevertheless, Atingi-Ego, says optimism remains.“Large-scale infrastructure investments and sustained private investment are expected to bolster growth. Faster disinflation and easing global interest rates could also improve financial conditions and stimulate domestic activity. While risks remain marginally tilted to the downside, the medium-term outlook is positive, with Uganda well-positioned to sustain robust growth through strategic reforms, enhanced resilience, and expanding sectoral opportunities,” he said, adding that while the domestic macroeconomic environment continues to strengthen, the MPC remains cautious of both global and domestic uncertainties that could affect the near-term outlook. The post BoU Maintains Key Lending Rate At 9.75% As ‘Domestic Economic Environment Improves’ appeared first on Business Focus.