The Monetary Policy Committee of the Central Bank of Madagascar (Banky Foiben’i Madagasikara, BFM) on 5 May 2026 left its policy rate unchanged at 12.00 percent, judging the existing restrictive stance appropriate to steer headline inflation back to the 5 percent medium-term target amid still-elevated external and domestic price pressures. The key rate has remained at 12.00 percent since a 150-basis-point increase in May 2025. BFM provided no new operational changes, noting that monetary conditions remain tight. Annual consumer-price inflation fell to 6.1 percent in January but edged up to 6.8 percent in March on higher food costs; the bank sees upside risks from oil, shipping and fertiliser prices and from wage increases, though it expects a gradual moderation from 2027. GDP growth is forecast at 3.8 percent in 2026 after a broad-based activity slowdown early in the year, while money supply growth picked up to 9.4 percent in March, within the 8–16 percent target band, and bank credit growth decelerated to 10.3 percent. Externally, the ariary appreciated 10.7 percent against the euro and 8.9 percent against the USD in Q1 as a narrower trade deficit and continued development-project inflows lifted foreign reserves to 7.3 months of import cover. The central bank highlighted softer IMF global growth forecasts (3.1 percent for 2026, with downside risks from Middle-East tensions) and a projected rebound in world inflation to 4.4 percent as key external headwinds. BFM reiterated it
Central Bank of Madagascar 2026-05-05
Central Bank of Madagascar keeps policy rate unchanged at 12.00 percent
Central Bank of Madagascar’s Monetary Policy Committee on 5 May left the policy rate at 12.00 percent, unchanged since May 2025, deeming the stance sufficiently restrictive to steer headline inflation—6.8 percent in March—back to its 5 percent medium-term goal despite elevated external and wage pressures. The bank announced no operational adjustments and pledged to remain tight, projecting 2026 GDP growth of 3.8 percent, citing improved foreign-reserve cover (7.3 months) after ariary appreciation, and flagging ongoing global inflation and Middle-East tensions as key risks.