BoB maintains 5% rate

Bank of Botswana (BoB) has decided to maintain the bank rate at 5 per cent, BoB governor Mr Moses Pelaelo had said.

He said the decision was taken by the central bank’s Monetary Policy Committee (MPC) meeting held on June 27, 2019.

Mr Pelaelo told members of the media on Thursday that in April and May 2019 inflation was below the lower bound of the Bank’s objective range of 3  to 6 per cent, mainly reflecting base effects associated with the increase in public transport fares and electricity tariffs in the second quarter of 2018.

“Nonetheless, in the medium term, inflation is forecast to remain within the Bank’s 3 to 6 per  cent objective range,” he said.

The positive inflation outlook in the medium term, Mr Pelaelo said was due to subdued domestic demand pressures and the modest increase in foreign prices.

He said this outlook was subject to upside risks emanating from the potential rise in administered prices and government levies and or taxes, beyond current forecasts.

“However, modest growth in global economic activity, technological progress and productivity improvement present downside risks to the outlook,” he said.

Furthermore, the BoB governor said Real Gross Domestic Product grew by 4.5 per cent in 2018, compared to a lower expansion of 2.9 per cent in 2017. This...

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