Africa-Press – Eswatini. The Central Bank of Eswatini (CBE) has increased its interest rate to five per cent from 4.5 per cent.
CBE Governor Dr Phil Mnisi said the increase was effected in consideration with the relevant global, regional and domestic economic factors as well as the price and financial stability mandate.
He said on Thursday, CBE together with the Monetary Policy Consultative Committee (MPCC) held a meeting to consider the appropriate monetary stance.
“The bank decided to increase the discount rate by 50 basis points from 4.5 per cent to five per cent effective July 23, 2022,” he said in a monetary policy statement.
Mnisi said the escalating geopolitical tensions continued to weigh down on global growth prospects. The tightening global monetary policy conditions in response to elevated inflation outlook were also expected to impede economic growth.
“The International Monetary Fund (IMF) notes that the downside risks to global growth have worsened compared to their April 2022 assessment. The level of growth will be clarified in the next assessment. The South African economy grew by 1.9 per cent in the first quarter of 2022 following a 1.4 per cent growth in the fourth quarter of 2021. The South African Reserve Bank (SARB) revised up its growth forecast to two per cent from 2022 (from 1.7 per cent forecasted in May) whilst growth for 2023 was revised down to 1.3 per cent (from 1.9 per cent) and 1.5 per cent (from 1.9 per cent) for 2024,” he said.
Adding, Dr Mnisi said South African annual consumer inflation rose to 7.4 per cent in June 2022, from 6.5 per cent recorded in May 2022. Due to higher food and fuel prices, South African inflation was seen reaching 6.5 per cent in 2022 and 5.7 per cent for 2023.
“Consequently, the SARB increased the repurchase rate by 75 basis points to 55 per cent from (4.75 per cent),” he said.
He said on the domestic front, economic activity was estimated to have increased by 4.5 per cent, on a year-on-year and seasonally adjusted basis, in the first quarter of 2022 from a revised growth of two per cent in the fourth quarter of 2021. Dr Mnisi noted that the pickup in economic activity was mainly supported by resilient growth in the primary and secondary sectors.
He said on a quarter-on-quarter basis, gross domestic product (GDP) rose by 4.4 per cent, seasonally adjusted, recovering from a decline of one per cent in the previous quarter.
Reserves at E10bn
The country’s gross official reserves are at E10 billion.
CBE Governor Dr Phil Mnisi said as at July 15, gross official reserves amounted to E10 billion, equivalent to an estimated 3.7 months import cover.
He said at the end of June, total public debt stood at E29.2 billion (37. 4 per cent of GDP) increasing by 8.2 per cent from E26.9 billion recorded at the end of April.
He added that the bank would continue to monitor international, regional and domestic developments that influence the movements of inflation.
Stability
The governor said CBE would act appropriately in line with its mission to foster price and financial stability that was conducive to the economic development in Eswatini.
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