Uganda hikes rates as inflation spikes, policy to stay tight

The Bank of Uganda’s decision to hike its policy interest rate by a further 100bp, to 17.0%, today appears to be a response to the sharp pick-up in inflation in September. The bulk of the monetary tightening cycle has probably now happened, but with inflation likely to rise further above target we think there is scope for an additional 100bp or so of rate hikes before the end of this year.

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