Uganda’s Central Bank Executes Largest Rate Hike Amid Currency Crisis

Uganda's central bank implemented a significant interest rate increase, raising the benchmark rate by 2 percentage points during an emergency meeting on October 14, 2026. This move represents the most substantial rate hike globally this year, as officials aim to counteract currency depreciation and inflationary pressures.

The Ugandan shilling has reached its lowest value since 1993, primarily due to high demand for the dollar, increased yields on US bonds, and the withdrawal of foreign investors from emerging markets.

Uganda's foreign-exchange reserves have fallen to approximately $6.7 billion, sufficient to cover only three months of imports. This level is below the regional standard, restricting the government's capacity to stabilize the shilling.

President Yoweri Museveni has opted against utilizing reserves to support the shilling, instead promoting strategies such as reducing imports and increasing earnings from exports and tourism to fortify the economy.