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
South African court rules Bitcoin qualifies as "capital", "money" under exchange controls
The South Gauteng High Court in Johannesburg has ruled that Bitcoin constitutes both “capital” and “money” under South Africa’s exchange-control framework, in a landmark judgment that could ... more
Ghana to evacuate 161 citizens from Cambodia as fake deportation scare spreads
Ghana has evacuated 85 citizens from Cambodia and is arranging the return of another 76, authorities said, amid concerns sparked by a fake online notice falsely claiming African nationals faced ... more
Kenya Airways and Rubis Energy to build Africa’s first sustainable aviation fuel refinery in Kenya
Flag carrier Kenya Airways Plc (NSE:KQ) and Rubis Energy Kenya, a subsidiary of Rubis SCA (EPA: RUI), a French energy group, have signed a memorandum of understanding to develop Africa’s first ... more