Botswana became the first African central bank to raise interest rates after the Iran war triggered a global energy shock, with inflation seen more than doubling this month.
The monetary policy committee lifted the key rate to 5.5% from 3.5% Governor Lesego Moseki told reporters at a briefing in the capital, Gaborone, on Thursday.
“The MPC expects inflation to increase significantly in the short term and breach the upper band of the objective range of 3% to 6% in the second quarter due to the recent increases in fuel prices, public transport fares and medical aid premiums,” he said.
“Inflation is expected to average 8.7% in 2026, then decline to 5.6% in 2027.”
There’s a risk inflation may exceed forecasts as second-round effects from fuel and administered prices, including electricity and transport fares, feed through, he added.
The US-Israel war on Iran that began Feb. 28 has led to a
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