Botswana Central Bank Keeps Interest Rate at 9.50%

The Bank of Botswana's Monetary Policy Committee kept its benchmark interest rate steady at 9.50%.  The Bank said: "Low growth in domestic demand and the forecast modest external inflationary pressures contribute to the positive inflation outlook in the medium term." also noting "However, in the short-term, inflation is expected to remain above the bank's objective range of 3 - 6 percent due to the impact of transient factors. These include the increase in fuel prices and public transport fares."

Previously the Bank also kept the bank rate unchanged at 9.50% during its October meeting, while the Bank last dropped the rate 50 basis points to 9.50% in December last year.  Botswana recorded annual price inflation of 8.8% in October, 8.6% in September, 7.8% in July, 7.9% in June, 8.3% in May, and 8.2% in April, and above the central bank's target range of 3-6%, according to the central bank.

The Bank said domestic output grew an estimated annual rate of 12.4% in the second quarter, driven largely by the 23.7% growth reported in the mining sector; with the non-mining sector growing just 7.4%.  Botswana's currency, the Botswana Pula (BWP), has weakened by over 10% against the US dollar so far this year, while the USDBWP exchange rate last traded around 7.45

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