The Central Bank of the Solomon Islands (CBSI) has decided to maintain an accommodative monetary policy stance for the next six months to support economic activity while keeping inflation below 5%. As part of the decision, CBSI introduced a policy rate set at 1.5% as a new operational tool in its monetary policy framework. The policy rate is intended to serve as the main signal of CBSI’s stance and as a benchmark to guide interest rates across the economy, including commercial bank lending and deposit rates, with the aim of improving transparency and forward guidance. CBSI revised up its growth outlook to 3.6% for 2025 and 3.8% for 2026, with foreign reserves projected at around 12 months of import cover in 2026; credit growth is expected to remain modest. Headline inflation eased to 1.6% in December 2025 and is projected to rise temporarily in Q1 2026 before easing to about 3.5% by June 2026 and 3.4% by December 2026, while core inflation is expected to remain around 1% in 2026. CBSI indicated it will continue monitoring domestic and global developments and stands ready to adjust its stance if inflationary pressures intensify or significant macroeconomic shocks emerge, while work continues to put in place systems to support effective implementation of the new policy rate.
Central Bank of the Solomon Islands 2026-02-19
Central Bank of the Solomon Islands maintains accommodative stance and introduces 1.5% policy rate
The Central Bank of the Solomon Islands (CBSI) will maintain an accommodative monetary policy for six months, introducing a 1.5% policy rate to guide interest rates and enhance transparency. CBSI revised its growth outlook to 3.6% for 2025 and 3.8% for 2026, with inflation projected to rise temporarily in early 2026 before easing. CBSI remains vigilant to adjust its stance if inflationary pressures or macroeconomic shocks occur.