Botswana's central bank maintained its benchmark Bank Rate at 5.50 percent as "subdued domestic demand pressures and benign foreign price developments contribute to the positive inflation outlook in the medium term."
Bank Botswana (BB), which cut its rate by 50 basis points in August, added the outlook was subject to downside risks from sluggish global economic activity and ow commodity prices while this could also be adversely affected by large rises in administered prices and government levies along with global food and oil prices in excess of forecasts.
BB targets inflation in a range of 3.0 to 6.0 percent and the inflation rate in October eased to 2.7 percent from 2.8 percent in September.
Gross Domestic Product grew by an annual rate of 1.6 percent in the second quarter, down from 2.7 percent in the first quarter due to a 23 percent drop in mining output. Non-mining output rose 4 percent, BB said.
The exchange rate of Botswana's pula has been rising slowly the U.S. dollar this year and was trading at 10.6 to the dollar today, up 6.6 percent this year.
BB said in October that its exchange rate policy entails a 0.38 percent upward rate of crawl for the nominal effective exchange rate for the rest of this year.
This appreciation of the pula is in contrast to the period from August 2011 until January 2016 when the pula fell over 40 percent.
