Bank of Botswana Raises Monetary Policy Rate to 3.5% but Holds Off on Lending Rate Hikes

Bank of Botswana Raises Monetary Policy Rate to 3.5% but Holds Off on Lending Rate Hikes. The Bank of Botswana’s Monetary Policy Committee (MPC) has announced an increase in the Monetary Policy Rate (MoPR) by 160 basis points—from 1.9 percent to 3.5 percent—following its meeting on 30 October 2025.

The central bank stated that while the adjustment is necessary to maintain macroeconomic stability and manage inflationary pressures, commercial banks have been directed not to raise their Prime Lending Rates (PLRs) in response.

The decision marks the first rate adjustment since 2023 and is aimed at supporting long-term economic balance while ensuring that credit conditions remain favourable for businesses and households.

For Botswana’s entrepreneurs and business community, the Bank’s decision signals a measured approach to stabilising the economy without disrupting access to finance. By holding PLRs steady, the central bank aims to protect businesses—particularly small and medium enterprises (SMEs)—from potential increases in borrowing costs that could affect growth and investment.

The MPC noted that the current economic environment requires maintaining a balance between curbing inflation and sustaining economic recovery efforts. The move is expected to reinforce investor confidence and strengthen the country’s financial resilience amid evolving global market conditions.

This development also underscores the Bank’s continued commitment to prudent monetary policy management and financial sector stability, both of which are crucial to maintaining Botswana’s business competitiveness and investment attractiveness.