- Decision
- Maintain
- Rate change
- 0 bps
- Discount rate
- 6.75%
The Central Bank of Eswatini and its Monetary Policy Consultative Committee left the discount rate at 6.75 per cent at the 30 January 2026 meeting, citing contained inflation and firm domestic growth as grounds for holding policy steady. Following a 25 bp cut in May 2025, the rate has remained unchanged at 6.75 per cent. Banks are expected to keep the prime lending rate at 10.25 per cent until the next review. Headline consumer inflation slipped to 2.3 per cent in December 2025, and the Bank retained its 2026 forecast at 3.97 per cent; output expanded by 5.8 per cent y/y in Q3 2025, lifting full-year GDP growth to 5.6 per cent. Private-sector credit grew 9.8 per cent y/y to E22.4 bn, while the banking sector’s NPL ratio edged down to 6.7 per cent. Gross official reserves stood at E11.9 bn, equal to 2.8 months of imports, and public debt reached E40.2 bn (41.8 per cent of GDP). The statement notes an IMF upgrade of 2026 global growth to 3.3 per cent and continuing disinflation, with the South African Reserve Bank also holding its repo rate at 6.75 per cent. The central bank pledged to keep monitoring domestic and external developments to protect price stability and the currency peg.
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.