Botswana lowers key rate as inflation seen within target range

By Brian Benza

GABORONE (Reuters) -Botswana’s central bank lowered its policy rate by 25 basis points to 2.40% on Thursday, saying it saw scope to ease monetary policy as inflation was projected to stay within its target range.

Inflation in the southern African country fell slightly to 3.1% in October from 3.2% in September, within the Bank of Botswana’s preferred 3% to 6% band.

“The MPC (Monetary Policy Committee) projects the economy to operate below capacity in the medium term and thus not generate any inflationary pressures,” bank Governor Cornelius Dekop told a news conference.

Inflation is projected to average 4.9% next year and 4.7% in 2025, he added.

The Monetary Policy Rate, based on a 7-day instrument, had been at 2.65% since August 2022.

(Reporting by Brian Benza; Writing by Bhargav Acharya and Tannur Anders; Editing by Alexander Winning)