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Botswana's central bank kept its Bank Rate unchanged at 5.0 percent and repeated its statement from August that "the prevailing monetary policy stance is consistent with maintain inflation within the objective range of 3 - 6 percent" given the current state of the economy and the outlook.


The Bank of Botswana (BoB), which has maintained the rate since cutting it to the current level in October 2017, also reiterated the outlook for price stability remains positive with inflation falling to 2.9 percent in September from 3.0 percent in August, below the lower bound of the target range.

Subdued domestic demand pressures and a modest rise in foreign prices contribute to the positive outlook, with upside risk from a potential rise in administered prices, commodity prices and taxes.


Downside risks to inflation arise from restrained global growth, technological progress and productivity improvement along with modest wage growth, BoB said.


Botswana's economy grew by an annual 5.3 percent in the second quarter, up from 4.8 percent in the first quarter, helped by a recovery in mining.


Continued accommodative monetary conditions and higher government spending, as well as stable water and electricity supply, should support activity in the non-mining sectors and overall BoB expects the economy to operate close to, but below full capacity in the medium term, posing no risk to the inflation outlook.

 

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