The Bank of Uganda held its benchmark lending rate at 9% during its December meeting, after trimming it by 100 bps in the previous session, to support economic growth. Policymakers noted that economic activity has been moderating since the beginning of the year, due to a combination of a slowing global growth alongside domestic factors including lower tourism and exports earnings. The economy is now projected to expand in the range of 5.5% to 6% in 2019, and the pace sustained into 2020. Meanwhile, annual headline and core inflation rose to 3 percent and 2.9 percent in November, but still below the policy target of 5%. The inflation outlook in the short-term remained unchanged from the October 2019 forecast, although risks persist mainly due to unpredictable weather conditions. However, inflation is expected to converge to the target of 5% in the medium-term. Interest Rate in Uganda averaged 12.79 percent from 2011 until 2019, reaching an all time high of 23 percent in November of 2011 and a record low of 9 percent in February of 2018.
Interest Rate in Uganda is expected to be 9.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Uganda to stand at 8.50 in 12 months time. In the long-term, the Uganda Interest Rate is projected to trend around 8.75 percent in 2020, according to our econometric models.