The International Monetary Fund (IMF) revised Uganda's growth forecast for the 2015/16 (July-June) fiscal year to 5 percent from the 5.8 percent it predicted in May, the fund said in a statement.

The Bank of Uganda (BoU) has aggressively ramped up its benchmark interest rate this year in response to price pressures fuelled by a weak local currency and surging food costs.

Since April, BoU has raised the Central Bank Rate (CBR) by a total of 600 basis points to 17 percent.

The IMF said "inflation expectations and pressures in the foreign exchange market are subsiding" as a result.

Year-on-year headline inflation rose to 8.8 percent from 7.2 percent in September although core inflation, BoU's target, slowed to 6.3 percent from 6.7 percent over the same period.

The shilling has been broadly firmer since early October but it still down 17.5 percent against the dollar this year.