- Decision
- Maintain
- Rate change
- 0 bps
- discount rate
- 6.75%
The Central Bank of Eswatini’s Monetary Policy Consultative Committee on 20 November 2025 left the discount rate unchanged at 6.75 percent, judging the current stance consistent with supporting economic activity and safeguarding the lilangeni’s parity with the South African rand amid a moderate 2025 inflation outlook revised slightly lower to 3.20 percent. After a 25-bp cut in May that took the rate from 7.00 percent to 6.75 percent, the authority has held policy steady through subsequent meetings. Banks are expected to keep the prime lending rate at 10.25 percent until the next review. October headline inflation edged up to 2.9 percent, below the Bank’s 3–6 percent comfort range midpoint, while second-quarter GDP rebounded to 3.4 percent y/y from a 1.0 percent contraction in the first quarter; private-sector credit rose 2.1 percent m/m in September and the banking sector NPL ratio eased to 7.1 percent. Official reserves stood at E13.7 billion on 14 November, covering 3.2 months of imports. Externally, the IMF nudged up 2025 global growth to 3.2 percent and sees world inflation easing to 4.2 percent, while most advanced-economy rates are on hold except for a 25-bp US cut in October. The central bank reiterated its readiness to adjust policy in line with its price and financial-stability mandate.
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.