Uganda's central bank raised its benchmark interest rate by 225 basis points to 12%, according to the Bank of Uganda. The decision tightens monetary policy in response to the Ugandan shilling's depreciation, worsening external balances, and rising inflation risks.
The rate increase will push up borrowing costs for businesses and reduce returns for savers across the economy. The central bank's move reflects efforts to stabilise the currency and contain inflation through tighter money supply.