The Monetary Policy Committee of the Central Bank of Lesotho (CBL) raised the CBL Rate by 25 basis points to 7.00% per annum, citing increased upside inflation risks and tighter regional and global financial conditions despite contained inflation, weak domestic demand and an adequate external position. Over the past year, the rate was cut by 25 basis points to 6.50% in November 2025, held through March 2026, raised by 25 basis points to 6.75% in May and held in July. The new rate maintains a 25-basis-point differential to the South African Reserve Bank’s 7.25% policy rate, which the committee considers sufficient to sustain the exchange-rate peg and support domestic activity. Inflation eased to 2.6% in August and is projected to rise to 4.7% in 2027, while growth is expected to remain modest in 2026 before gradually picking up over 2027-2028; private-sector credit increased in July, but banking-sector liquidity remained adequate and demand pressures limited. Net international reserves remained above their target floor, with import cover at 5.6 months in the second quarter. Conflict-related energy and shipping disruptions pushed crude oil above USD 100 per barrel, raising global inflation risks and weighing on growth. Future decisions will remain data-dependent, with the committee ready to act decisively to defend the peg, safeguard reserves and preserve macroeconomic stability.
2026-09-24Central Bank of Lesotho
Central Bank of Lesotho Raises Policy Rate by 25 Basis Points to 7.00%
The Central Bank of Lesotho’s Monetary Policy Committee raised the CBL Rate by 25 basis points to 7.00%, citing increased upside inflation risks and tighter regional and global financial conditions. The rate maintains a 25-basis-point differential to South Africa’s 7.25% policy rate, which the committee considers sufficient to sustain the exchange-rate peg and support domestic activity.