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Botswana slashes bank rate

Botswana’s central bank on Tuesday slashed the country’s bank rate by a 50 basis point to 7.5% in a bid to stimulate economic growth and avert the growing unemployment figures in the country.

“The current state of the economy, in which unemployment remains high alongside below-trend economic activity, suggests scope for monetary policy easing to stimulate stronger output growth,” said the Bank of Botswana (BoB) Monetary Policy Committee.

“Accordingly, the Monetary Policy Committee decided to reduce the Bank Rate by half a percent to 7.5 percent.”

BoB said assumptions on both the domestic and external economic outlook, as well as the inflation forecast, suggest that reducing the bank rate is consistent with maintaining inflation within the bank’s 3 – 6 percent objective range in the medium term.

The central bank has cut the country’s bank rate for the fourth time by half a percentage, the last was in August to 8.0 percent following the June lowering by half a percentage point to 8.5 percent.

Meanwhile, the Monetary Policy Committee (MPC) concluded that the medium-term outlook for inflation is positive and inflation is forecast to remain within the 3 – 6 percent objective range for the remainder of 2013.

Inflation eased from 5 percent in September 2013 to 4.8 percent in October, and was within the Bank’s objective range of 3 – 6 percent.

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