The Bank of Botswana’s Monetary Policy Committee (MPC) raised the Monetary Policy Rate (MoPR) by 200 bp to 5.5 % at its 30 April 2026 meeting, framing the move as a recalibration to reinforce policy transmission and exchange-rate signal effectiveness amid a projected near-term breach of the 3–6 % inflation objective and continued economic slack. After a 160 bp “recalibration” lift to 3.5 % in October 2025, the committee had held the rate steady in February. All 7-day Bank of Botswana Certificates, repos and reverse repos will be conducted at the new MoPR, while the Standing Deposit and Credit Facility rates move to 4.5 % and 6.5 % respectively and banks remain barred from raising Prime Lending Rates. Headline CPI edged up to 4.2 % y/y in March from 4.0 % in February but is forecast to average 8.7 % in 2026 before retreating to 5.6 % in 2027; GDP shrank 0.7 % in 2025 after a 2.8 % fall in 2024, with the Ministry of Finance expecting 3.1 % growth this year, while the central bank flagged persistent deposit-concentration and liquidity asymmetries that will trigger extra Basel III capital charges by Q4 2026. Externally, the war in the Middle East is driving up oil, gas and other commodity prices, feeding domestic cost-push pressures and clouding the outlook for Botswana’s diamond exports against a backdrop of subdued global growth projected at 3.1 % in 2026. The MPC pledged vigilant monitoring and further action as needed, warning banks against widening lending spreads that could
Bank of Botswana 2026-04-30
Bank of Botswana raises Monetary Policy Rate by 200 basis points to 5.5%
Bank of Botswana lifted the Monetary Policy Rate by 200 bp to 5.5 % to improve transmission and exchange-rate signalling as inflation is expected to exceed the 3–6 % target amid weak growth. Standing Deposit and Credit Facility rates rise to 4.5 % and 6.5 % respectively, banks remain barred from raising prime lending rates, and the MPC cautioned against wider spreads while pledging further action if needed.