27 Feb 2020

Bank of Botswana’s Monetary Policy Committee (MPC) has decided to maintain the bank rate at 4.75 per cent.

Announcing the decision on Wednesday at a press conference, BOB Governor, Mr Moses Pelaelo said the decision was taken at the first MPC meeting of 2020 on Wednesday and further explained the committee looked at the constant inflation, which was at 2.2 per cent between December 2019 and January 2020.

 He said inflation remained below the bank’s objective range of 3-6 per cent and its forecast was to revert it to within the objective range in the second quarter of 2020 and into the medium term.

Mr Pelaelo said the downward rate of crawl of 1.51 per cent on the nominal effective exchange rate that was being implemented in 2020, the increment in public service salaries for 2020/2021 and the likely upward adjustment in administered prices in the second quarter of 2020, should exert some pressure on inflation.

He said the MPC concluded domestic demand pressures on inflation would remain subdued and also the increase in foreign prices modest, stating that the outlook for inflation, therefore remained positive.

The governor said the outlook was subject to upside risks emanating from the potential rise in administered prices and government levies and taxes, beyond current forecasts.

However,  he said lower growth in global economic activity and the recent outbreak of COVID-19, might further dampen global growth.

He said the effects of COVID-19 might not be felt now, but said it posed a ‘serious global economic downturn if the cure is not found in earnest’. ENDs