Analysts forecast interest rates cut

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The latest drop in the annual inflation rate to an all-new four-decade low, provides scope for Bank of Botswana (BoB) to reduce interest rates, economic analysts believe.

The annual inflation rate was recorded at 3.6 percent in January this year, a decrease of 0.2 of a percentage point on the December 2014 rate of 3.8 percent. The downward movement of annual inflation rate between January 2014 and January 2015 was attributed to the decrease in prices of commodities in the main component of transport, which dropped by 3.0 percentage points.

According to analysts at RMB Global Markets Research, the inflation rate is likely to end the first half of the year below 3.5 percent providing room for the central bank to cut the benchmark bank rate by half a percentage point.

Editor's Comment
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