Botswana’s central bank has maintained its monetary policy rate at 1.90% for the third consecutive meeting, as announced on Thursday.
In January, inflation in the Southern African nation rose to 2.5% year-on-year, up from 1.7% the previous month.
The Bank of Botswana aims for inflation to remain between 3% and 6% in the medium term.
The economy of Botswana is heavily reliant on diamond exports, and a significant decline in global demand for diamonds led to an economic contraction last year.
- Advertisement -
Also, the bank aims to stimulate Botswana’s economy by lowering the lending rate to promote borrowing. In July, the International Monetary Fund (IMF) projected that Botswana’s economic growth would reach only 1% in 2025, a significant decrease from the previous estimate of 3.6%.
This sluggish economic growth is primarily attributed to a substantial drop in diamond trading and mining operations, which represent 80% of the country’s exports, one-third of its fiscal revenues, and a quarter of its gross domestic product (GDP).
However, the government is optimistic about a recovery this year, anticipating improvements in the global diamond market and enhanced performance in other economic sectors.
