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Uganda Central Bank Hikes Rates Sharply to Defend Shilling
14 Oct
Summary
- Uganda's central bank enacted a significant interest rate increase.
- The benchmark rate was raised to 12% from 9.75% in an emergency meeting.
- This aggressive move aims to stabilize the Ugandan shilling at a record low.
In an emergency meeting, Uganda's central bank implemented a substantial increase to its benchmark interest rate. This move, the most significant in 15 years, saw the rate climb from 9.75% to 12%.
The primary objective behind this aggressive monetary policy adjustment is to bolster the Ugandan shilling. The currency had recently reached an all-time low against major foreign exchange markets, prompting swift intervention from the Bank of Uganda.
Governor Michael Atingi-Ego announced the decision, signaling the central bank's determination to safeguard the shilling's value and restore market confidence. The committee's action reflects concerns over the shilling's rapid depreciation.
