- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 3.5%
The Bank of Botswana’s Monetary Policy Committee left the Monetary Policy Rate (MoPR) unchanged at 3.5 percent at its 4 December 2025 meeting, judging that muted domestic activity—hit by weak diamond revenues—and an inflation outlook still projected to stay within the 3–6 percent objective range warranted no further move despite lingering price pressures. Following a 160-basis-point “recalibration” in October that lifted the MoPR from 1.9 percent, the Committee maintained its instruction that commercial banks keep Prime Lending Rates steady, underscoring an unchanged operating framework in which 7-day BoB Certificate auctions and repo facilities continue to be conducted at the policy rate. Headline inflation is expected to remain inside the target band, though upside risks stem from higher water, electricity, fuel and food costs, global supply tightness and geopolitical tensions, while downside pressures include the weak global and domestic growth outlook and constrained fiscal revenues; shifts in administered prices could alter the path. The central bank said it will keep financial and price developments under “close watch” and stands ready to act to sustain price stability.
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.