- Decision
- Raise
- Rate change
- 200 bps
- monetary policy rate
- 5.5%
The Bank of Botswana’s Monetary Policy Committee (MPC) raised the Monetary Policy Rate (MoPR) by 200 bp to 5.5 % at its 30 April 2026 meeting, framing the move as a recalibration to reinforce policy transmission and exchange-rate signal effectiveness amid a projected near-term breach of the 3–6 % inflation objective and continued economic slack. After a 160 bp “recalibration” lift to 3.5 % in October 2025, the committee had held the rate steady in February. All 7-day Bank of Botswana Certificates, repos and reverse repos will be conducted at the new MoPR, while the Standing Deposit and Credit Facility rates move to 4.5 % and 6.5 % respectively and banks remain barred from raising Prime Lending Rates. Headline CPI edged up to 4.2 % y/y in March from 4.0 % in February but is forecast to average 8.7 % in 2026 before retreating to 5.6 % in 2027; GDP shrank 0.7 % in 2025 after a 2.8 % fall in 2024, with the Ministry of Finance expecting 3.1 % growth this year, while the central bank flagged persistent deposit-concentration and liquidity asymmetries that will trigger extra Basel III capital charges by Q4 2026. Externally, the war in the Middle East is driving up oil, gas and other commodity prices, feeding domestic cost-push pressures and clouding the outlook for Botswana’s diamond exports against a backdrop of subdued global growth projected at 3.1 % in 2026. The MPC pledged vigilant monitoring and further action as needed, warning banks against widening lending spreads that could blunt the intended stimulus to market liquidity and 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.