Uganda's central bank kept its main lending rate unchanged on Monday for the sixth meeting in a row, saying an uncertain economic environment meant a cautious approach was necessary.

The Bank of Uganda's Central Bank Rate has been at 9.75% since October 2024.

Governor Michael Atingi-Ego told a press conference that the current policy stance remained appropriate to support economic activity while ensuring that inflation stabilises around the bank's 5% medium-term target.

Inflation inched up to 3.2% year on year in January from 3.1% in December.

Atingi-Ego said inflation was projected to remain slightly below target in 2026, within a range of about 3.8%-4.3%, before stabilising around 5%.

Economic growth is forecast to be between 6.5% and 7% in the current fiscal year ending in June, rising to an average of 8% over the medium term because of high levels of public investment and oil-related infrastructure developments, the governor added.

The East African country is preparing to start pumping commercial volumes of crude oil later this year.