The Central Bank of Lesotho (CBL) held its policy rate at 6.50% per annum as inflation eased but was expected to remain elevated in the medium term, while domestic growth was projected to be modest. Over the past year, the CBL held the rate at 7.25% in March, cut it by 25 basis points to 6.75% in August and by another 25 basis points to 6.50% in November. The Monetary Policy Committee raised the net international reserves target floor to USD 860 million from USD 830 million to underwrite the loti-rand peg, while banks are expected to keep prime lending rates no more than 350 basis points above the CBL rate. Inflation declined to 4.1% in December 2025 and was projected at 4.7% over the medium term. Economic activity rebounded from October to November on stronger domestic demand, higher private-sector credit and financial-sector performance, although manufacturing and transport contracted. Net international reserves rose to USD 1.22 billion on Southern African Customs Union receipts, remaining comfortably above the target floor. The global growth outlook improved slightly and inflation was expected to moderate further, though trade tensions, geopolitical disruptions and fiscal vulnerabilities remained risks. The CBL said it would monitor global and regional developments and stood ready to safeguard the peg’s credibility.
2026-02-10Central Bank of Lesotho
Central Bank of Lesotho Holds Policy Rate at 6.50%
The Central Bank of Lesotho (CBL) held its policy rate at 6.50% as inflation eased to 4.1% in December 2025, while medium-term inflation was projected at 4.7% and domestic growth remained modest. The CBL raised its net international reserves target floor to USD 860 million to support the loti-rand peg, with reserves at USD 1.22 billion.