East African Business Week

Kampala, Uganda - Inflationary pressures if persistent may lead BOU to introduce a Shs100,000($38.1) note according to the Governor Emmanuel Tumusiime Mutebile. With inflation at 30.5%, and with no specific projection on when it will subside, BOU will have to use its monetary tool to curb the runaway inflation.
While appearing before the National Economy Committee of parliament Mutebile hinted at making this adjustment to the Uganda currency as he explained interventions the central bank would make to curb inflation. Uganda has currency denominations in coins of Ush50, Ushs100, Ushs200 and Ushs500 and paper banknotes of Ushs1000, Ushs2000(introduced in 2010) , Ushs5000, Ushs10,000, Ushs20,000 and Ushs50,000(introduced in 2010).
The current monetary tools used by BOU are to raise the Monthly Central Bank Rate so as to reduce the amount of credit that is accessible to HouseHold users. The current CBR is 23% where commercial Bank Loans have soured to between 25% and 29%. This has raised conflicting arguments among economists with some suggesting it's not a good tool since stifles lines of credit whereas others have said it is the only option the central bank has at the moment.
If inflation keeps rising, then the Bank has to keep raising the CBR and this will just keep hurting borrowers. The extremes of rising interest rates may not be sustainable in the long run.
The Central Bank would have to keep making adjustments so as not hurt the macro-economy stability that it is supposed to maintain. The Bank would either lobby for currency devaluation (which can likely cause a lot more inflation) or introduce notes of higher value just like the Zimbabwe Central Bank kept on issuing higher value notes to tame hyperinflation. The Zimbabwean inflation was way above 100% which piled pressure on the currency and at the moment, other the South African Rand and US Dollar are the main currencies used in Zimbabwe.
"The current monetary tool is working and we do not want to get to the level where introducing the 100000 note will be necessary," Elliot Mwebeya says.