Bank of Botswana holds policy rate unchanged

Bank of Botswana maintained its main interest rate at 2.40 per cent while reducing its projection for this year’s average inflation, in a statement released on Thursday, according to Reuters.

Bank of Botswana Governor Cornelius Dekop said the economy of the nation was anticipated to run below its potential shortly and not lead to demand-driven inflationary pressures.

According to his statement at a press conference, inflation in 2024 is expected to average 4 per cent, which is less than the 4.9 per cent forecast made in December. This is due to a decrease in inflation in Botswana’s trading partners, a decline in the price of commodities internationally, and a stronger local currency relative to the South African rand.

At its most recent monetary policy meeting in December, the bank cut its policy rate to 2.40 per cent. The Monetary Policy Rate, which is based on a seven-day instrument, had been 2.65 per cent for over a year before that.

Moreover, from 3.5 per cent in December, the annual rate of inflation rose to 3.9 per cent in January. According to Dekop, inflation in February was also anticipated to be 3.9 per cent.