The Central Bank of Solomon Islands maintained its policy rate at 1.5% for the next six months, judging that inflation is being driven mainly by external and supply-side pressures rather than excess domestic demand. A stable exchange rate and subdued demand are expected to partly limit the pass-through to domestic prices. Headline inflation rose to 4.6% in June 2026 and is projected to reach 5%–6% by year-end before moderating to about 4.4% from March 2027. Core inflation is expected to remain below 1%. The central bank also cut its 2026 growth forecast to 3.0% from 3.8%, citing higher fuel costs and weather-related disruptions, while forecasting a recovery to 3.7% in 2027. It may reassess the policy stance if inflation becomes more persistent or broadens into domestic demand.
2026-09-01Central Bank of the Solomon Islands
Central Bank of Solomon Islands holds policy rate at 1.5% for six months
The Central Bank of Solomon Islands held its policy rate at 1.5% for the next six months as inflation remains driven mainly by external and supply-side factors. Inflation is projected at 5%–6% by end-2026, while the 2026 growth forecast was lowered to 3.0% from 3.8%.