Africa-Press – Lesotho. The Monetary Policy Committee of the Central Bank of Lesotho (CBL) held its 105th meeting where it deliberated on the latest global, regional and domestic economic developments as well as the developments in the financial markets.
Speaking at the Press briefing held in Maseru on Tuesday, the Governor of the Central Bank of Lesotho Dr Maluke Letete said having considered the Net International Reserves (NIR) developments and outlook, regional inflation and interest rates, domestic economic conditions and the global economic outlook, the committee has taken into consideration some decision which are believed to be of benefit to the nation as per the global impacts.
He said the decisions include the increase of the NIR target to US$750 million from US$710 million which he said is expected to be sufficient to maintain the one-to-one exchange rate peg between Loti and the Rand.
He added that the committee has also decided to maintain the CBL civil rate at 7.75 percent per annum, saying the committee will continue to closely make assessment based on the global economic development and their impact on the domestic economy especially the Net International Reserves (NIR) and respond accordingly.
Dr Letete said these decisions were taken after the committee noted that the global economic projections by the International Monetary Fund (IMF) have not changed from the October 2023 World Economic Outlook.
He however mentioned that the labour markets are stated to have improved for most of the selected economies except for China which is believed was due to the increased hiring activity during the holiday season with solid employment growth in the tourism and retail sectors in the last quarter of 2023.
He added that for South Africa, economic sectors were hit hardest by the recent pandemic but the reduction in the mining and manufacturing sectors moderated the fall in unemployment.
Moreover, Dr Letete mentioned that inflation rates increased in some selected advanced and emerging market economies while the declined in others in December 2023.
He revealed that the inflation rates were mainly due to the increased prices of food as well as alcoholic beverages and tobacco, and for some counties whose inflation declined, it was mainly due to the fuel prices showing that as a result, several central banks kept their policy rates unchanged.
Meanwhile, Dr Letete noted that the financial sector and the construction sector are currently the main sectors which the economy of Lesotho depends on for its economic growth and possibly for the next 3 to 5 years.
The global growth for 2023 is reported to have slowed down and the inflation rate rose in December 2023, and the upside risk may emanate from continued weak loti and the possibility of adverse weather in the near term.
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