The Bank of Botswana’s Monetary Policy Committee unanimously held the Monetary Policy Rate (MoPR) at 5.5 percent, balancing above-target inflation and upside risks against subdued growth. Over the past year, the MoPR rose by 160 basis points to 3.5 percent in October 2025 and by 200 basis points to 5.5 percent in April 2026. The central bank will conduct seven-day certificate auctions, repos and reverse repos at the MoPR, maintain a 4.5-6.5 percent standing-facility corridor and retain the moratorium on commercial banks’ Prime Lending Rates. Headline inflation eased to 9.4 percent in July but remained above the 3-6 percent objective range and is expected to stay above it through the first quarter of 2027, while the Ministry of Finance projects real gross domestic product growth of 3.1 percent in 2026 and domestic liquidity has improved. The central bank retained the pula framework’s equal weighting of the South African rand and International Monetary Fund Special Drawing Rights and its 2.76 percent downward crawl, saying earlier measures had supported foreign exchange market stability. Trade disruption, supply-chain strains and Middle East tensions are expected to keep global inflation elevated while global growth remains subdued. The central bank will continue monitoring developments and take appropriate action to maintain price and financial system stability.
2026-08-27Bank of Botswana
Bank of Botswana Holds Monetary Policy Rate at 5.5%
The Bank of Botswana unanimously held the Monetary Policy Rate at 5.5 percent, balancing inflation of 9.4 percent in July and upside risks against subdued growth. Inflation is expected to remain above the 3-6 percent objective range through the first quarter of 2027, while the pula framework’s equal currency-basket weighting and 2.76 percent downward crawl were retained.