- Decision
- Maintain
- Rate change
- 0 bps
- Policy rate after decision
- 5.5%
The Bank of Botswana’s Monetary Policy Committee unanimously held the Monetary Policy Rate (MoPR) at 5.5 percent, balancing above-target inflation and upside risks against subdued growth. Over the past year, the MoPR rose by 160 basis points to 3.5 percent in October 2025 and by 200 basis points to 5.5 percent in April 2026. The central bank will conduct seven-day certificate auctions, repos and reverse repos at the MoPR, maintain a 4.5-6.5 percent standing-facility corridor and retain the moratorium on commercial banks’ Prime Lending Rates. Headline inflation eased to 9.4 percent in July but remained above the 3-6 percent objective range and is expected to stay above it through the first quarter of 2027, while the Ministry of Finance projects real gross domestic product growth of 3.1 percent in 2026 and domestic liquidity has improved. The central bank retained the pula framework’s equal weighting of the South African rand and International Monetary Fund Special Drawing Rights and its 2.76 percent downward crawl, saying earlier measures had supported foreign exchange market stability. Trade disruption, supply-chain strains and Middle East tensions are expected to keep global inflation elevated while global growth remains subdued. The central bank will continue monitoring developments and take appropriate action to maintain price and financial system 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.