The Bank of Uganda raises its policy rate above 12%
The test The Bank of Uganda sets the Central Bank Rate above 12% at any decision before 1 Nov 2027.
Not under way · Confidence: medium · Reviewed 1 Nov 2026 · Scores from 1 to 10
This page answers: What could happen, how it is scored, and who is exposed?
Using this page
- Read the two scores: Likelihood and Impact are kept apart.
- Check what is happening, each fact with its source.
- Use the calendar for the dates to watch.
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Impact is the average of the four parts, rounded, plus one point when Canada is directly hit on two or more channels, up to 10.
Two separate scales from 1 to 10. Strature never multiplies or merges them.
What changed
Dated, newest first
- Governor: actions to mitigate the pace of depreciation; growth about 0.5 points lower; reserves US$6.6bn [4]
- CBR raised 225 bp from 9.75% to 12% at a special MPC meeting; largest move since October 2011; inflation 4.6% in September, forecast 7.0-7.5% over 12 months; core 5.5-6.0%; CRR 13.5% from 24 Sep; current account deficit up US$1.4bn to US$4.6bn; bank prepared to introduce further measures [1]
- Shilling near Shs3,920 per dollar on 15 Sep 2026, about 6% weaker, a two-year low as reported [3]
Why it matters
On 14 Oct 2026 the Bank of Uganda raised its Central Bank Rate by 225 basis points to 12%, at a special meeting, after the shilling slid and fuel costs rose with the Middle East conflict. It now expects inflation above its 5% target over the next year.
Why Likelihood 4 Policy-rate event: no market odds or forecaster count read, so 6 is the cap. Pushes: inflation forecast above target; the shilling's fall; a wider current account deficit; the bank's readiness for further measures. Brakes: a large hike just made; the growth cost the governor named; reserves rising.
Why Impact 4 Threshold case a quarter point above 12%; key price the policy rate.
The other facts on file (1)
- Reserves US$6.1bn, about 2.7 months of imports, end-May 2026; Board supported a tight monetary policy stance [2] (28 Jul 2026)
Where it sits
Where this risk sits
Size shows Impact. Colour shows the Likelihood band. The two scores are never combined.
- Low 1–3
- Elevated 4–6
- High 7–8
- Severe 9–10
- Bigger circle: higher Impact
- Solid ring: under way
- Red ring: highest Impact on this map
- Where it starts
- Who it reaches
The risk on this map
- The Bank of Uganda raises its policy rate above 12%Impact 4 of 10, Elevated. Likelihood 4 of 10, Elevated. · Uganda
How it spreads
The Bank of Uganda sets the Central Bank Rate above 12% at any decision before 1 Nov 2027.
Not under wayChannels 4 on the card
- CanadaNo Canadian loss sourced.
- CreditHigher borrowing costs; the governor expects growth about 0.5 points lower from the October move [4].
- The shillingA further hike would support the currency and slow imported inflation.
- NeighboursTrade with Kenya, Rwanda and South Sudan prices in shillings (Strature's view).
Three scenarios and their signposts
- S1
Hold at 12%
The shilling steadies and inflation peaks.
- S2
One more rise
Fuel and the shilling keep pushing.
- S3
Cuts
Oil prices ease and first oil arrives.
| Path | Signpost |
|---|---|
| S1 | Monthly inflation below the bank's forecast |
| S2 | The shilling's next leg down |
| S3 | Kingfisher production |
No probability is given for the three paths.
Dates to watch
The dates to watch
A dot is a day, a bar a month or a year; a hollow mark is tentative. The line marks today.
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The other side
A firm central bank can anchor expectations: the IMF backed its tight monetary policy stance in July [2], and higher rates draw portfolio money back to shilling assets (Strature's view).
Connected in Strature
- Was the Strait of Hormuz closed, or repriced cargo by cargo?
- Uganda
- Kenya
- Rwanda
- The Strait of Hormuz shuts again Driven by: The bank cites the Middle East conflict and higher energy prices.
- The Fed raises rates again by March 2027 Driven by: The bank cites tighter international financial conditions.
- Kenya rations fuel or its petrol cover falls below 10 days Shares a channel: Most of Uganda's fuel comes through Kenya.
- Uganda misses its June 2027 first-oil date Shares a channel: Oil inflows would support the shilling, per the IMF.
Sources
4 sources, numbered as the text cites them
- Bank of Uganda raises benchmark interest rate to 12% amid currency, inflation pressures. Nairametrics · 14 Oct 2026 · News · confidence medium · retrieved 1 Nov 2026
- IMF Executive Board concludes 2026 Article IV consultation with Uganda, PR 26/265. International Monetary Fund · 28 Jul 2026 · International body · confidence high · retrieved 1 Nov 2026
- Uganda shilling weakens 6% as fuel prices climb. The Rio Times · 16 Sep 2026 · News · confidence low · retrieved 1 Nov 2026
- BoU takes action on falling shilling. Daily Monitor · 15 Oct 2026 · News · confidence medium · retrieved 1 Nov 2026
Reviewed 1 Nov 2026 · version 1 · last change: first review · All risks