Southern Times Writer
Harare - The central bank committees in the Southern Africa region agreed in October to maintain their interest rates in a continuous bid to control inflation rates.
According to Trading Economics, the Central Bank of Botswana kept its benchmark interest rate unchanged at 4.75 percent on 31 October, 2019, after a 25-bps cut in the previous meeting, to support growth in a context of low inflation.
The headline inflation edged up to a seven-month high of 3 percent in September from 2.9 percent in the prior month but is projected to revert to within the objective range (3-6percent) in the second quarter of 2020. Policymakers also noted that growth slowed in Q2 mainly due to mining but mentioned government projections which indicate that domestic economic activity will likely expand by 4.3 percent and 4.6 percent in 2019 and 2020, respectively, helped by government spending.
The Bank of Namibia also left its benchmark repo rate steady at 6.75 percent on 23 October, 2019, following a 25-bps cut in the previous meeting, to support the economic recovery and maintain the one-to-one link between the Namibian dollar and the South African rand. “Policymakers noted that economic activity remained subdued in the first eight months of the year, as reflected in mining, construction, wholesale and retail trade and agriculture.
“In contrast, the manufacturing sector improved, but the economy is projected to remain weak in 2019. Meantime, headline inflation fell to a near four-year low of 3.3 percent in September, and it is expected to average 3.9 percent in 2019. The South African Reserve Bank decided unanimously to leave its benchmark repo rate unchanged at 6.50 percent on 19 September, 2019, as widely expected, after trimming it by 25 bps in the prior meeting, despite concerns about economic growth.
“Policymakers noted that inflation expectations continued to moderate and said that they will continue to focus on anchoring inflation expectations near the mid-point of the inflation target in the interest of balanced and sustainable growth. The bank added that future policy decisions will continue to be highly data-dependent, sensitive to the assessment of the balance of risks to the outlook and will seek to look-through temporary price shocks. Bank lending rate in South Africa remained unchanged at 10 percent in October from 10 percent in September of 2019,” stated Trading economics
The Reserve Bank of Zimbabwe’s Monetary Policy Committee (MPC) held its inaugural meeting on 28 and 29 October 2019. During its deliberations, the committee noted several issues that required urgent implementation for attainment of macro-economic stability for sustainable development. In particular, the Committee focused its attention on the recent economic developments, inflation trends, cash challenges in the economy, exchange rate and foreign exchange. However, the interest rate has not changed since its hike to 70 percent.
The Reserve Bank of Malawi left its benchmark policy rate unchanged at 13.5 percent at its October 2019 meeting, saying that the rise in food prices is seen as temporary and does not pose a risk to the medium-term inflation target. Annual inflation is projected to average 9 percent in 2019 and to gradually decline to 5 percent in 2021, contingent on favourable weather pattern in the next two growing seasons as well as prudent fiscal management. Policymakers also noted that the GDP continues to recover and is expected to grow by 5 percent in 2019, despite the adverse effects of Cyclone Idai and the weak performance of tobacco exports. The Lombard rate and the Liquidity reserve requirement were also kept at 13.9 percent and 5.0 percent, respectively.