- Decision
- Maintain
- Rate change
- 0 bps
- Discount rate
- 6.75%
The Central Bank of Eswatini (CBE), acting with its Monetary Policy Consultative Committee, left the discount rate unchanged at 6.75 % on 27 March 2026 and asked banks to keep the prime lending rate at 10.25 %, judging that a “cautious approach” remains warranted as inflation pressures ease but upside risks persist. The stance extends a stable policy path that has prevailed since a 25 bp cut in May 2025. Headline consumer inflation slipped to 1.9 % y/y in February from 2.1 % in January, and the Bank has trimmed its 2026 inflation forecast to 3.33 % (from 3.97 %) and 2027 to 3.48 %; GDP accelerated to 5.8 % y/y in Q3 2025, while private-sector credit fell 1.4 % m/m in January yet rose 5.3 % y/y as the NPL ratio improved to 6.0 %. Gross official reserves were E11.2 bn on 20 March, covering 2.6 months of imports, and public debt reached E38.8 bn (40.4 % of GDP). The Bank noted subdued global growth, lingering above-target inflation in some advanced economies, and stable policy rates among major central banks; regionally, South Africa’s economy cooled and the SARB held its repo at 6.75 %. The CBE pledged to keep monitoring international and domestic conditions and to respond prudently to safeguard 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.