(Bloomberg) -- Uganda increased interest rates for the first time since October 2018 to counter accelerating inflation and support the weakening shilling.

The monetary policy committee raised the benchmark rate to 7.5% from 6.5%, Deputy Governor Michael Atingi-Ego told reporters Thursday. The hike comes as inflation pressures accelerate, he said.

Uganda’s core inflation rate rose to the highest in five years last month, exceeding the central bank’s 5% medium-term target for the first time since May 2017. Prices of food and fuel are surging because of Russia’s war with Ukraine, while import costs are increasing as an investor exit from emerging markets dents the shilling.

The currency extended its gains after the decision was announced and traded 0.8% stronger at 3,764 per dollar by 12:48 p.m. in Kampala, the capital.

Read: Central Bank Intervention Fails to Halt Ugandan Shilling Fall

The hike unwinds some of the 250 basis points of easing announced since 2020 to prop up the nation’s coronavirus-ravaged economy and is a further blow to consumers after President Yoweri Museveni ruled out cutting taxes or subsidizing imports.

Read: Tax Cuts, Subsidies on Fuel, Wheat Suicidal, Ugandan Leader Says

Central bankers in emerging markets including Egypt and Kenya have been tightening monetary policy to anchor inflation expectations and attract investors seeking higher yields as the US, European and other central banks in developed markets hike tighten monetary policy to curb inflation.

Museveni has yet to name a new head of the Bank of Uganda after Emmanuel Tumusiime-Mutebile, Africa’s longest-serving central bank governor, died in January.

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