Botswana Interest Rate2021 Data | 2022 Forecast | 2006-2020 Historical | Calendar

The Central Bank of Botswana left its benchmark interest rate steady at a record low of 3.75% during its August 2021 meeting to continue supporting the domestic economy, while risks to the inflation outlook are assessed to be skewed to the upside. Policymakers noted that the annual headline inflation rate hit an over nine-year high of 8.9%, remaining above the upper bound of the Bank’s medium-term objective range of 3-6%, mainly due to the upward adjustment in domestic fuel prices. However, inflation is projected to revert to within the objective range in the second quarter of 2022, mainly on account of the dissipating impact of the recent upward adjustment in value-added tax (VAT) and administered prices from the inflation calculation. Meanwhile, it is projected that the economy will operate below full capacity in the short to medium term and, therefore, not creating any inflationary pressures, going forward.

The Central Bank of Botswana left its benchmark interest rate steady at a record low of 3.75% during its June 2021 meeting, where it has been since its meeting in October. The decision aims to continue supporting the economy, while risks to the inflation outlook are assessed to be skewed to the upside. The real GDP shrank by 7.9% in 2020, as Covid-19 restrictions hit both the mining and non-mining sectors; but the economy is estimated to have performed better in Q1 2021, amid the gradual easing of Covid-19 restrictions and vaccine rollouts. Meanwhile, the headline inflation rate climbed to an over 8-year high of 6.2% in May 2021, breaching the upper bound of the Bank’s medium-term target range of 3-6% for the first time since June 2013. Policymakers noted that the increase in inflation in May mainly reflects second-round effects of the recent upward adjustments in administered prices; but it is projected to revert to within the objective range in Q2 2022.

The Central Bank of Botswana kept its benchmark interest rate unchanged at 3.75% during its regular April 2021 meeting, after slashing it by 50 bps in October. The decision is meant to continue supporting a pandemic-battered economy and comes against a backdrop of low inflationary pressures. The economy contracted slightly less in the fourth quarter of 2020, helped by the easing of lockdown restrictions. Meantime, headline inflation hit a two-year high of 3.2% in March but remained close to the lower band of the Bank’s objective range of 3-6%.

The Central Bank of Botswana kept its benchmark interest rate unchanged at 3.75% during its regular February 2021 meeting, after slashing it by 50 bps in October. The decision is meant to continue supporting the economy amid the impact of the global pandemic and comes against a backdrop of low inflationary pressures. Policymakers said the economy is estimated to have performed better in the fourth quarter of 2020 compared to the third quarter amid the easing lockdown restrictions. Meantime, it was noted that inflation rose marginally to 2.3% in January of 2021 from 2.2%, still remaining below the lower bound of the Bank’s medium-term objective range of 3-6%.