The Bank of Botswana increased its benchmark interest rate by 160 basis points to 3.5% on Thursday, marking its first rate hike after six consecutive meetings of holding rates steady. The move comes as inflation in the Southern African nation rose sharply to 3.7% in September, up from 1.4% in August.
The central bank’s decision reflects growing concerns over inflationary pressures and financial stability amid a challenging economic climate. Earlier this month, Moody’s Investors Service downgraded Botswana’s sovereign credit rating, pointing to the government’s struggle to adapt to a slump in the global diamond market—one of the country’s key revenue sources—as well as rising public debt levels.
The Bank of Botswana said the policy adjustment aims to anchor inflation expectations and support long-term macroeconomic stability, as the country faces weaker export earnings and fiscal constraints.
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Source:Africa Publicity
