Botswana Interest Rate2006-2020 Data | 2021-2022 Forecast | Calendar | Historical

The Central Bank of Botswana slashed its benchmark interest rate by 50 bps to 4.25% during its April 2020 meeting to support the economy amid the challenging economic conditions posed by the Covid-19 pandemic. The Committee also reduced the primary reserve requirements ratio for commercial banks to 2.5%, and the prudential capital adequacy ratio to 12.5% from 15%, as a way to ease liquidity conditions and increase the availability of credit.

The Central Bank of Botswana left its benchmark interest rate steady at 4.75% during its February 2020 meeting, saying it will continue with an accommodative monetary policy stance to support growth. Headline inflation remained low at 2.2 percent in January, standing below the Bank’s objective range of 3-6% while the economy grew 3.1% in Q3 2019, the slowest expansion in two years, amid declines in agriculture and mining.

The Central Bank of Botswana kept its benchmark interest rate unchanged at 4.75 percent during its December meeting, to spur economic growth. Policymakers said that inflation outlook remains positive amid subdued domestic demand pressures and modest rise in foreign prices. Headline inflation fell to an over two-decade low of 2.4 percent in October, breaching the lower bound of the Bank’s target of 3-6 percent; and it is projected to remain below the bottom end of the objective range in the near term before reverting within the target in Q2 2020 and into the medium-term. The economy grew 3.9 percent in the twelve months to June compared to a faster expansion of 4.9 percent in the same period of 2018, hampered primarily by lower production of diamonds; and it is anticipated that it will operate close to, but below its full capacity in the short to medium-term.

The Central Bank of Botswana kept its benchmark interest rate unchanged at 4.75% on October 31st 2019, after a 25 bps cut in the previous meeting, to support growth in a context of low inflation. The headline inflation edged up to a seven-month high of 3% in September from 2.9 percent in the prior month but is projected to revert to within the objective range (3-6%) in the second quarter of 2020. Policymakers also noted that growth slowed in Q2 mainly due to mining but mentioned government projections which indicate that domestic economic activity will likely expand by 4.3% and 4.6% in 2019 and 2020, respectively, helped by government spending.