Botswana’s central bank left its benchmark rate unchanged at 1.90% for the sixth straight meeting, as policymakers weighed fragile economic growth against signs of future price pressures. Reuters reports that inflation eased to 1.1% in July from 2.0% in June, well below the bank’s 3%–6% target range.
Even with subdued price growth, the Bank of Botswana raised its inflation outlook, projecting 3.5% in 2025 and 5.9% in 2026, compared with earlier forecasts of 2.7% and 4.6%. The revision reflects expectations of higher import costs and adjustments in domestic demand, Reuters noted.
To reinforce competitiveness and safeguard reserves, the government announced a faster pace of pula depreciation, raising the annual downward adjustment from 1.51% to 2.76%. Market watchers say this strategy is aimed at easing foreign exchange pressures while supporting export performance.
The decision to keep rates steady highlights the central bank’s cautious stance as it seeks to balance economic support with rising inflation risks. Analysts suggest businesses should prepare for tighter conditions in the medium term if price growth accelerates as projected.
