Uganda's central bank aggressively loosened its policy at the beginning of COVID-19 outbreak to help prepare the economy to absorb the shock.
The bank said it forecast economic growth to contract by between 0.2% and 0.5% this year.
"The economic outlook is extremely uncertain, largely because of the unpredictable course of the virus and the wide range of shocks hitting the economy," Bank Governor Emmanuel Tumusiime-Mutebile said in a statement.
"The downside risks to the economic growth projection include the possibility of an increase in new infections and a longer period to get the virus under control."
The bank cut a total 200 basis points off its main rate between April and June.
Uganda's economic output contracted by 6% in the second quarter as anti-coronavirus measures battered key sectors like tourism, services and manufacturing.
The World Bank expects economic growth in Uganda to fall as low as 0.4% in 2020 from 5.6% last year.
Upon confirming its first COVID-19 case in March, Uganda imposed one of the continent's toughest lockdowns to try to stem the spread of the virus.
Authorities shut borders, closed schools and shuttered all but the most essential businesses. Public gatherings were banned as well as both public and private transport.
(Reporting by Elias Biryabarema; Writing by George Obulutsa; Editing by Hugh Lawson)
