Africa-Press – Eswatini. Decisive monetary policy actions, as well as improved monetary policy frameworks, have helped anchor inflation expectations.
According to the global financial stability report: The last mile: Financial vulnerabilities and Risks, the IMF cautioned central banks including that of Eswatini to avoid premature monetary easing. The IMF said where progress on disinflation was enough to suggest that inflation was moving sustainably toward the target, central banks should then gradually move to a more neutral stance of policy. The IMF further highlighted that resilient growth and faster disinflation point toward favourable supply developments, including the fading of earlier energy price shocks, and the striking rebound in labour supply supported by strong immigration flows in many advanced economies.
Liquidity
The international organisation stated that quantitative tightening and the reduction in balance sheets needed to proceed with care. Central banks should carefully monitor market functioning issues and mobilise to address potential market stresses. Ensuring that banks are prepared to access central bank liquidity and intervening early to address liquidity stress in the financial sector can mitigate financial instability. Given the potential risks of the fast-growing private credit market, authorities should consider a more proactive supervisory and regulatory approach. It is worth noting that the CBE has maintained the interest rate unchanged at 7.50 per cent since July 2023. The next monetary policy meeting is scheduled for May 31, 2024, where the CBE is expected to give its decision on interest rate.
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