Bank of Botswana maintains policy rate at 3.5%

A frozen policy rate signals that Botswana's central bank is playing it safe while the diamond industry keeps dragging the whole economy down.

Bank of Botswana holds rates at 3.5%

• Governor Lesego Moseki's MPC kept the Monetary Policy Rate parked at 3.5% on 26 February.
• Standing Deposit and Credit Facility rates stayed locked at 2.5% and 4.5%.
• Commercial banks got told not to hike their prime lending rates.
• Some lenders quietly widened margins anyway, and the Bank is pushing back.

Inflation is behaving, but risks loom

• Headline inflation nudged up to 4.1% in January 2026 from 3.9% in December.
• That figure still sits comfortably inside the 3%-6% target band.
• Forecasts peg it at 4.5% for 2026 and 4.7% for 2027.
• Electricity tariff hikes and a foot-and-mouth outbreak could spike prices.

The diamond slump is absolutely wrecking the economy

• Diamonds generate roughly a third of government revenue and most forex earnings.
• Lab-grown competition and weak global demand keep crushing the market.
• Debswana has piled up stockpiles with zero plans to ramp up production.
• The economy is projected to contract by 0.4% in 2025 because of it.

Recovery hopes rest on non-mining sectors

• A tiny 0.1% GDP bump through September 2025 came from tourism, finance, and services.
• The Ministry of Finance is projecting a 3.1% rebound for 2026.
• Around 70% of Botswana remains unexplored for critical minerals.
• U.S. partnership interest in new mining ventures could open fresh revenue streams.

What steady rates mean for regular people

• Borrowing costs for home loans and car finance stay predictable for families.
• Stable inflation keeps everyday purchasing power from eroding too fast.
• Savers get stuck with low deposit returns as the trade-off.
• The next MPC decision drops on 30 April 2026.