Thursday, October 3, 2013

Botswana holds rate steady on positive inflation outlook

    Botswana's central bank held its bank rate steady at 8.0 percent, saying the current economic outlook and inflation forecast "suggests that the current monetary policy stance is consistent with managing inflation within the Bank's 3-6 percent objective in the medium term."
    The Bank of Botswana, which has cut the bank rate three times this year for a total cut of 150 basis points, said the medium-term outlook for inflation was positive and inflation was forecast to remain within the central bank's target range.
    Botswana's inflation rate eased to 5.6 percent in August from 5.7 percent in July with weak domestic demand underpinning the expectation that inflation will fall further in the short term.
    However, the bank said this outlook could also be affective by "unanticipated large increases in administered prices and government levies, as well as a possible increase in international food and oil prices to levels beyond the current forecast."
    Botswana's Gross Domestic Product expanded by an annual 7.9 percent in the second quarter, up from 3.3 percent in the first quarter and the bank said it expects non-mining output to remain below potential in the medium term and generate minimal inflationary pressure.


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