FX.co ★ Bank of Uganda Delivers Massive Rate Hike

The Bank of Uganda raised its benchmark interest rate by 225 basis points to 12% at an emergency meeting on October 14, 2026, ending an extended pause in monetary tightening. This move lifted borrowing costs to their highest level since 2017, as the central bank moved to counter a sharp depreciation of the shilling. Governor Michael Atingi-Ego said the rate hike was necessary because the continued weakening of the currency could stoke inflation, warranting a tighter monetary policy stance. The shilling has been under sustained pressure since August and has fallen to a series of record lows against the US dollar this month, losing about 12% since the start of the year, amid heightened demand for foreign exchange from oil importers grappling with elevated global energy prices. Last week, Ugandan President Yoweri Museveni instructed the central bank not to sell US dollars.