Mid-Term Review of the 2010 Monetary Policy Statement: Bank of Botswana

The Bank of Botswana has published the Mid-Term Review of the 2010 Monetary Policy Statement. The review notes that the prevailing monetary policy stance remains consistent with achieving the current medium-term objective for CPI inflation of 3 – 6 percent. The review further indicates that the policy remains appropriate for supporting economic recovery, including sustained growth in the non-mining sectors.

As anticipated at the beginning of this year, the economy began to recover during the first quarter although the overall level of domestic economic activity was below trend, a factor that exerted low demand pressures on inflation. Price developments were also in line with the projections, with inflation rising in the first half of 2010, from 5.8 percent in December 2009 to 7.7 percent in June 2010, due to the increase in value added tax (VAT), as well as electricity tariffs and fuel prices. Click here to read more.