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The Bank of Uganda has lowered its key benchmark rate from 10 percent to 9.75 percent.

In a statement, the bank’s Monetary Policy Committee (MPC) said the decision was made on the strength of improved prospects for the future path of prices.

“Inflation is expected to stay below target in the near term, but some uncertainties remain, so the MPC is taking a cautious approach. This rate reduction is intended to keep inflation under control while supporting socio-economic transformation,” the statement read in part.

Uganda’s inflation rate stood at three percent in September, according to the bank, down from 3.5 percent in August. The bank attributed the decrease mainly to lower oil and food prices.

The bank added that it also lowered the interest rate to make borrowing more affordable to help stimulate economic activity.