The National Bank of Ethiopia (NBE) Monetary Policy Committee held the policy rate at 15% and the annual credit growth cap at 24%, maintaining a tight stance to sustain single-digit inflation amid robust growth and rising external price risks. The policy rate was also held at 15% in September and December 2025. The seven-day interbank rate rose to 17.9% in February, reflecting liquidity pressure at some private banks. Headline inflation declined to 9.7% in February and has remained in single digits since December 2025, while real GDP grew by 9.2% in FY 2024/25 and indicators signalled continued momentum in FY 2025/26. Bank credit nevertheless expanded 45.3% year on year by end-February. Ethiopia’s balance of payments remained in surplus during the first eight months of FY 2025/26, supported by exports, private transfers, services and capital-account inflows. Escalating Middle East tensions and higher oil prices have increased downside risks to global growth and upside risks to domestic inflation through energy costs and supply-chain disruption. The MPC signalled more frequent macroeconomic reviews and said it would assess whether additional policy measures are required.
National Bank of Ethiopia Holds Policy Rate at 15%
The National Bank of Ethiopia held its policy rate at 15% and annual credit growth cap at 24% to sustain single-digit inflation, despite bank credit expanding 45.3% year on year by end-February. Headline inflation fell to 9.7%, while higher oil prices and Middle East tensions increased upside risks and prompted plans for more frequent policy reviews.