Banners
Banners
Banners
Banners

BoB decides to keep interest rates steady

Staff Writer
On the back of an anticipated slowdown in the annual rate of inflation in the short- to medium-term, the Bank of Botswana has once again decided not to move interest rates.

BoB's Public Relations Officer, Chepete Chepete, says in a statement that while current inflation levels are still relatively high and out of the central bank's 3 to 6 percent target, optimism that inflationary pressures will ease off as the new year approaches has influenced BoB not to adjust their Bank Rate for now.

"At (a) meeting held today (Tuesday), the Bank of Botswana's Monetary Policy
Committee (MPC) decided to maintain the Bank Rate at 15.5 percent," says the statement.

"While inflation remains above the Bank's objective range of 3 to 6 percent, a
more positive outlook is projected. It is anticipated that inflation will decline going into 2009 and move towards the Bank's medium-term objective range."

For the first time since October last year, the annual inflation rate recorded a decline from 15.1 percent to 14 percent on the back of reductions in fuel pump prices. In the past two months, the government has reduced petrol and diesel prices by a cumulative 200thebe and 250thebe respectively in response to a decline in international oil prices from US$147 in July to around US$70 this week.

This is the second time that the MPC has decided to leave the Bank Rate unchanged after previously raising it as many times this year as inflationary pressures mounted.

In a bid to tame money supply growth, BoB twice raised the Bank Rate by 0.5 percentage points from 14.5 percent to 15.5 percent. Commercial banks subsequently raised their prime rates to

Banners
17 percent.

Although the lowering of fuel prices has cooled off inflation, BoB still fears the effects of administered prices and consumption taxes. "The outlook for declining inflation could be temporarily threatened by the effect of any increase in consumption taxes and/or administered prices," the statement continues.

"The Bank is also concerned about indications of generalised higher levels of price increases for several categories of goods and services, which are indicative of second-round effects of the past increase in fuel prices and expectations of continuing high levels of inflation."

Chepete says the second-round effects, which could be exacerbated by high levels of growth in government expenditure, credit and incomes, need to be restrained by maintaining a restrictive monetary policy. Botswana's high credit growth contrasts with the situation in other countries where lack of credit is constraining economic activity. 

"In the circumstances, the Bank remains committed to responding appropriately to all economic and financial developments to keep inflation under control without undermining sustainable economic growth," he says.While there has been a suggestion from certain quarters that BoB should actively use the interest rate tool as a restrictive measure, many analysts have voiced their concern against increasing the Bank Rate, which is already high compared to other countries.

On the other hand, the school of thought that interest rates cannot counter inflationary pressure emanating from outside, such as fuel and food prices, has given weight to the monetary authorities' decision not to adjust the Bank Rate.



Banners
Banners ?>

Selefu

Mr. Kennafela. What prompted you to be a politician?

Latest Frontpages

Todays Paper Todays Paper Todays Paper Todays Paper Todays Paper Todays Paper
Banners
Adana Escort
Adıyaman Escort
Afyon Escort
Ağrı Escort
Aksaray Escort
Amasya Escort
Ankara Escort
Antalya Escort
Antep Escort
Ardahan Escort
Artvin Escort
Aydın Escort
Balıkesir Escort
Bartın Escort
Batman Escort
Bayburt Escort
Bilecik Escort
Bingöl Escort
Bitlis Escort
Bolu Escort
Burdur Escort
Bursa Escort
Çanakkale Escort
Çankırı Escort
Çorum Escort
Denizli Escort
Diyarbakır Escort
Düzce Escort
Edirne Escort
Erzincan Escort
Elazığ Escort
Erzurum Escort
Eskişehir Escort
Giresun Escort
Gümüşhane Escort
Hakkari Escort
Hatay Escort
Iğdır Escort
Isparta Escort
İskenderun Escort
İstanbul Escort
İzmir Escort
İzmit Escort
Karabük Escort
Karaman Escort
Kars Escort
Kastamonu Escort
Kayseri Escort
Kıbrıs Escort
Kırıkkale Escort
Kırklareli Escort
Kırşehir Escort
Kilis Escort
Kocaeli Escort
Konya Escort
Kütahya Escort
Malatya Escort
Manisa Escort
Maraş Escort
Mardin Escort
Mersin Escort
Muğla Escort
Muş Escort
Nevşehir Escort
Niğde Escort
Ordu Escort
Osmaniye Escort
Rize Escort
Sakarya Escort
Samsun Escort
Siirt Escort
Sinop Escort
Sivas Escort
Şırnak Escort
Tekirdağ Escort
Tokat Escort
Trabzon Escort
Tunceli Escort
Urfa Escort
Uşak Escort
Van Escort
Yalova Escort
Yozgat Escort
Zonguldak Escort
Alaçatı Escort
Aliağa Escort
Alsancak Escort
Bornova Escort
Buca Escort
Çeşme Escort
Çiğli Escort
Gaziemir Escort
Karşıyaka Escort
fethiye escort
iskenderun escort
iskenderun escort
iskenderun escort
iskenderun escort
iskenderun escort karataş escort ceyhan escort ankara escort etimesgut escort çankaya escort altındağ escort mamak escort keçiören escort