Bank of Botswana (BoB) has slashed its key interest rate by 25 basis points to 1.9%, marking the third reduction this year.
Despite inflation creeping up to 3.5% in July—just within the bank’s target range—the central bank is pressing forward with its strategy to invigorate economic activity.
“We hope that this decision will assist to stimulate the economy,” Bank of Botswana governor Cornelius Dekop declared during Thursday’s Monetary Policy Committee meeting.
The rate cut aims to spur lending and counteract Botswana’s sluggish economic growth, which is projected to hit just 1% in 2024 according to the IMF, a steep decline from earlier forecasts of 3.6%.
This downturn has been exacerbated by a significant 24% drop in diamond production in the first half of 2024, reflecting broader struggles in the mining sector that heavily impacts Botswana’s economy.
