Botswana c-bank cuts key rate to 9% to support economy

By bne IntelliNews May 2, 2013

Botswana’s central bank has cut its benchmark lending rate by 50bps to 9% to spur economic growth, it said in a statement on its website. The bank’s Monetary Policy Committed (MPC) noted that inflation will remain outside its target range of 3%-6% in the short term, but the outlook remains positive and, given recent indications of slower economic growth, a more accommodative policy stance is consistent with achieving the inflation objective in the medium term.

Botswana’s annual inflation rose to 7.6% in March from 7.5% in February, but was below its March 2012 level of 8%. The central bank said that weak domestic demand and expected low external inflationary pressures would contribute to a downward trend in inflation, which should converge to the medium-term target range in the second half of 2013. Potential risks to the outlook include unanticipated large increase in administered prices and government levies, as well as international food and oil prices increasing beyond current forecasts.

Botswana’s diamond-dependent economy grew 3.7% last year with the non-mining sector’s growth slowing to 5.8% from 7.8% in 2011 and the mining sector contracting by 8.1%. The central bank expects non-mining output expansion to remain below potential in the medium term and to exert minimal inflationary pressure.

Related Articles

Egypt and Russia sign supplementary agreements to advance El-Dabaa nuclear plant

Egypt and Russia have signed a supplementary intergovernmental agreement to push forward the El-Dabaa nuclear power plant project in Egypt, Al Arabiya reported on July 8, citing a statement from ... more

Malawi-focused Mkango Resources' unit to merge with US-based Crown PropTech

Lancaster Exploration (Lancaster), a subsidiary of Mkango Resources (Mkango), has announced a merger with Crown PropTech Acquisitions (CPTK), a US-listed special purpose acquisitions company. ... more

Africa adds 4.5GW new hydropower capacity in 2024, says IHA

Africa made notable progress in hydropower development in 2024, adding over 4.5 GW of new capacity, more than double the 2 GW installed in 2023, according to the International Hydropower Association ... more

Dismiss