Botswana holds key rate again as inflation stays above target
Botswana's central bank left its policy rate unchanged, citing second-round effects from fuel and electricity costs, even as inflation eases.
Botswana's central bank has kept its benchmark interest rate unchanged for a second straight meeting, choosing caution as it weighs the inflationary impact of higher domestic fuel prices and electricity tariffs.
Annual inflation in the southern African nation eased to 9.4% in July from 10.7% in June, but remains well above the central bank's medium-term target band of 3% to 6%.
Governor Lesego Moseki said inflation is expected to stay above that range until the first quarter of 2027. He stressed the need for continued vigilance and careful management of inflation expectations to guide prices back within the target.
The decision comes as Botswana's economy struggles with a prolonged slump in the global diamond market, which has contributed to successive contractions in gross domestic product over the past two years.
In its updated projections, the central bank lowered its average inflation forecast for 2026 to 7.9% from a previous estimate of 9.0%. It now sees inflation slowing to 4.9% in 2027, down from an earlier forecast of 5.5%.