BoB hands Christmas gift to borrowers

Friday, December 15, 2023 | 510 Views |

No relief: Inflation has dropped from its double digit highs last year to 3.1 percent but most of the fall has been due to fuel prices. Food prices remain stubborn and within that category, a wide range of items have been escalating quickly but quietly
PIC: MORERI SEJAKGOMO

The Bank of Botswana’s (BoB) decision to trim interest rates by 25 basis points – the first cut since April 2020 – gives borrowers a little more breathing room in a generally difficult year for households.

The central bank last week shaved interest rates by 25 basis points from 2.65 to 2.4 percent, a move that means borrowers on variable rate loans such as personal and credit card loans, will enjoy a decrease in their repayments. Consumers intending to take up new loans will also enjoy the new lower interest rates.

The reduction in interest rates follows an updated BoB inflation forecast which shows lower than previously expected prices in the economy going forward. The central bank now expects inflation to average 4.9 percent this year, from its October forecast of 5.2 percent, providing scope to ease borrowing costs and support economic activity.

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