- Decision
- Maintain
- Rate change
- 0 bps
- Discount rate
- 6.75%
The Central Bank of Eswatini (CBE) kept the discount rate unchanged at 6.75% in its 24 July 2026 statement, citing global, regional and domestic conditions under its price and financial stability mandate as it revised down its 2026 inflation forecast to 3.0% and noted stronger domestic growth; the decision extends an unchanged stance since the 25 bp cut in May 2025 from 7.0%. Banks are expected to maintain the prime lending rate at 10.25% until the next monetary policy meeting. Headline inflation eased to 2.6% in June 2026, with the lower near-term outlook reflecting continued moderation in food inflation and oil prices, although the CBE said medium-term forecasts were revised up and risks remain elevated because of oil market challenges. Real GDP grew 6.1% year on year on a seasonally adjusted basis in the first quarter of 2026, supported by a rebound in the secondary sector, while private sector credit continued to expand and the non-performing loan ratio edged down to 6.9% in May. Reserves stood at E11.8 billion as of 17 July, equivalent to 2.6 months of import cover. The CBE said it will continue to monitor international, regional and domestic developments influencing inflation and act appropriately.
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.