- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 1.9%
The Bank of Botswana’s Monetary Policy Committee on 17 April 2025 left the Monetary Policy Rate (MoPR) unchanged at 1.9 percent, judging that below-target inflation and an economy still operating below full capacity warrant a steady stance despite heightened global trade uncertainty and a domestic recovery that could prove muted. The MoPR has been kept at 1.9 percent since at least February 2025. Operations continue to be anchored on the 1.9 percent policy rate, with 7-day Bank of Botswana Certificate, repo and reverse-repo auctions conducted at that level, while the Standing Deposit and Standing Credit Facility rates remain at 0.9 percent and 2.9 percent respectively. Headline inflation edged up to 2.8 percent in March from 2.7 percent in February, staying below the 3–6 percent medium-term objective band; the committee projects inflation to average 2.5 percent in 2025 and 4.9 percent in 2026, with risks described as balanced. Real GDP contracted 3 percent in 2024 on mining weakness, and the authorities’ baseline foresees 3.3 percent growth in 2025, though the MPC warns the upturn may be subdued amid fiscal strains and soft diamond demand. International oil prices have fallen, and reciprocal trade tariffs threaten exports, underscoring a global backdrop of geoeconomic fragmentation. The committee expects inflation to stay within target over the medium term and signalled that future decisions will remain guided by evolving domestic and external conditions and market liquidity.
Rate evolution
The Bank of Botswana unanimously maintained the Monetary Policy Rate at 5.5 percent on 27 August 2026. Headline inflation fell from 10.7 percent in June to 9.4 percent in July but remained above the 3–6 percent medium-term objective range, and the Bank projected it would stay above range through the first quarter of 2027, mainly because of supply-side pressures including fuel prices, higher electricity tariffs and related cost-push effects. Risks remained tilted to the upside, reflecting potential second-round effects, livestock restrictions, a possible El Niño and external commodity and trade pressures.
Growth remained subdued amid adverse external developments, despite marginal real gross domestic product growth of 0.2 percent in the twelve months to March 2026. The Bank judged that measures implemented to date had eased liquidity conditions, improved monetary policy transmission and supported foreign exchange market stability, warranting a data-driven stance that supports economic activity while managing inflation expectations.