(Xinhua) -- Uganda's central bank on Thursday announced that it was increasing the Central Bank Rate (CBR) to 7.5 percent from 6.5 percent to control the rising inflation.

In a statement issued here, the Bank of Uganda said it will continue to raise the CBR until inflation is firmly contained around the medium-term target of 5 percent.

Uganda's annual headline inflation and core inflation rose to 6.3 percent and 5.1 percent in May 2022 from 2.7 and 2.3 percent in January 2022 respectively, according to the bank.

The bank said inflation is increasing rapidly and spreading broadly across the basket of goods and services.

The supply and demand imbalances caused by the COVID-19 pandemic and heightened by the Russia-Ukraine conflict are the main underlying sources of broader price pressure, said the bank.

The annual headline inflation and core inflation are now forecast to average at 7 and 6.1 percent respectively in 2022, which are higher than earlier projections.

Inflation is projected to peak in the second quarter of 2023 before gradually declining to around the medium-term target of 5 percent by mid-2024.