Africa-Press – Botswana. The Bank of Botswana (BOB) has maintained the Monetary Policy Rate at 3.5 per cent, citing the need to manage inflation and support economic stability. Speaking during a Monetary Policy Committee (MPC) media briefing Governor Moseki said the MPC met at a time when the global economy continued to face shifting trading patterns and heightened geopolitical tensions.
Despite these challenges, he noted that the global economy had shown stronger-than-expected resilience in 2025.
“Domestically, increased uncertainty and continued weakness in the diamond market have put pressure on Botswana’s fiscal and external buffers,” he said.
Looking ahead, Mr Moseki stressed that accelerating growth-enhancing initiatives and economic diversification efforts, as outlined in the Botswana Economic Transformation Programme (BTEP) and National Development Plan 12, was essential for supporting a sustainable recovery in 2026.
He added that Botswana’s strong institutions and sound macroeconomic policy framework provided an opportunity to attract investments capable of driving economic transformation.
The Governor also revealed that Botswana’s real Gross Domestic Product (GDP) contracted by three per cent in the 12 months to June 2025,a sharper decline compared to the 0.6 per cent contraction reported at the end of 2024.
“The weak performance was mainly due to the continued contraction in mining output and subdued non-mining sector activity,” he explained.
On inflation, Mr Moseki said headline inflation rose slightly from 3.7 per cent in September to 3.9 per cent in October 2025, remaining within the medium-term objective range of three to six percent.
“The marginal increase in inflation was attributable to higher price increases for alcoholic beverages, tobacco and transport, mainly due to price pressures stemming from the July 2025 adjustment of exchange rate parameters,” he noted.
The MPC forecasts inflation to increase into medium term averaging 2.7 per cent in 2025 and 5.3 per cent in 2026. However, Mr Moseki cautioned that the overall risk of inflation exceeding current projections remains elevated.
He added that the economy is expected to continue operating below full capacity in the short to medium term, which should limit demand-driven inflationary pressures. The Governor announced that the MPC has also directed that the seven-day Bank of Botswana Certificates, repos and reverse repos will be conducted at the policy rate of 3.5 per cent.
The standing deposit facility (SDF) rate will remain at 2.5 percent with 100 basis points below the policy rate. Commercial banks have been instructed not to increase their prime lending rates.
For More News And Analysis About Botswana Follow Africa-Press
