Botswana central bank cuts interest rate again by 25 basis points

AFRICAN BUSINESS AND ECONOMYAugust 22, 2024 at 6:58 PM UTC

TLDR

Botswana's central bank reduces key lending rate for second consecutive meeting, signaling room for eased monetary policy.
Bank of Botswana lowers Monetary Policy Rate to 1.90% as economy remains underperforming.
Governor Cornelius Dekop cites ongoing expectations of economy operating below capacity in medium term, leading to minimal demand-driven inflationary pressures.

Botswana's central bank reduced its key lending rate for the second consecutive meeting on Thursday, signaling room to ease monetary policy as the economy remains underperforming.

The Bank of Botswana lowered its Monetary Policy Rate by 25 basis points to 1.90%, following a similar cut in June.

Governor Cornelius Dekop explained that the decision reflects ongoing expectations that Botswana's economy will continue to operate below capacity in the medium term, thereby not generating significant demand-driven inflationary pressures.

Key Takeaways

The move is part of broader efforts to stimulate economic activity amid subdued growth. In July, Botswana's consumer inflation accelerated to 3.7% year-on-year from 2.8% in June, remaining within the central bank's medium-term target range of 3% to 6%. Despite this increase, inflation is projected to average 3.0% for 2024, a slight decrease from the 3.6% forecasted by the Bank of Botswana during its June meeting. Governor Cornelius Dekop emphasized that the current inflation levels still allow for the continued easing of monetary policy, as the overall economic environment remains subdued.

Botswana

Bank of Botswana

Interest Rates

Inflation

Economy

Economic Growth