- Decision
- Maintain
- Rate change
- 0 bps
- discount rate
- 7%
The Central Bank of Eswatini’s Monetary Policy Consultative Committee left the discount rate steady at 7.0 percent on 21 March 2025, judging that easing headline inflation—down to 4.0 percent in February from 4.1 percent in January—and still-subdued global and regional growth warranted a neutral stance while safeguarding price and financial stability. The rate has been unchanged since at least the January 2025 meeting, when it was also kept at 7.0 percent. No changes were announced to liquidity operations or other implementation parameters. Domestically, GDP is estimated to have risen 3.6 percent y/y in Q4 2024 and is projected to expand by 3.4 percent in 2025, supported by rebounds in secondary and tertiary sectors; private-sector credit grew 5.4 percent y/y to E24.7 billion in February. Gross official reserves stood at E5.7 billion, covering 2.7 months of imports at end-February, while public debt reached E36.6 billion (37.9 percent of GDP). The committee noted moderating global inflation and softer growth in major advanced economies amid geopolitical risks, and reiterated it will monitor domestic, regional and international developments and act as needed to maintain price and financial stability.
Rate evolution
From May 2025 to September 2026, the Central Bank of Eswatini cut the discount rate by 25 basis points to 6.75%, held it there through July 2026, and then raised it by 25 basis points to 7.00%. The May 2025 easing was presented as support for growth as activity was expected to slow and credit had contracted, while inflation forecasts were revised down on lower food and transport costs. Later decisions kept policy steady as inflation stayed relatively subdued and growth initially moderated, with the Bank stressing a prudent, flexible balance between supporting domestic activity and safeguarding price and financial stability, particularly the credibility of the peg and the SZL parity to the ZAR, reserve adequacy, and an external backdrop marked by global uncertainty, weather and energy risks, protectionism and mixed inflation trends.
By January and March 2026, despite broad-based gross domestic product growth, headline inflation easing to 1.9%, and lower inflation forecasts after approval of a lower electricity tariff, the Bank still held at 6.75%, saying it would monitor inflation and the currency peg and act cautiously as geopolitical tensions could disrupt global supply chains and raise import prices. On 29 May and 24 July, it again left the discount rate unchanged at 6.75%, taking a cautious approach as growth strengthened in the first quarter of 2026, headline inflation remained low, and risks centred on the oil market and an uncertain global, regional and domestic backdrop. On 25 September, the Bank raised the discount rate to 7.00%, effective 26 September, as global inflationary pressures intensified amid oil supply disruptions linked to Middle East tensions and domestic inflation rose to 2.8% in August, although it lowered its 2026 inflation forecast to 2.52% on weaker-than-expected outcomes, slower food inflation and favourable exchange-rate movements, while flagging risks from the Middle East impasse and a possible El Niño drought.