Policymakers raised rates for the first time in three years in October, citing concerns about rising inflationary pressures.

"(The) 12-month ahead inflation forecast has improved slightly, relative to October forecasts," Emmanuel Tumusiime-Mutebile, the bank's governor, told a news conference.

Core inflation, which the bank focuses on, edged down to 3.4 percent last month from 3.5 percent the previous month. The rate was expected to peak at between 6-6.5 percent in the second half of next year, lower than the previous forecast, the governor said.