The Bank of Uganda has raised interest rates for a third time to 9% from 8.5% in June, seeking to curb rising inflation.
The increase takes the increase in borrowing costs to 250 basis points since June.
Annual core inflation, which excludes food and energy, exceeded the central bank’s 5% medium-term target for a third successive month in July, accelerating to 6.3% from 5.5% in June. Headline price growth quickened to 7.9% from 6.8%.
Last month, Uganda held the first unscheduled monetary policy committee (MPC) meeting to be called in Africa since Russia’s invasion of Ukraine upended supply chains and caused commodity prices to surge.
The MPC sees economic growth at 2.5% to 3% this year, rising to 5% and 6% in 2023. That compares with a previous estimate for expansion of 4.5% to 5% in 2022.