On 30 April 2026 the Monetary Policy Committee raised the monetary policy rate from 3.5% to 5.5%. Annual inflation was 4.2% in March, up from 4.0% in February, and the Bank expected it to breach the 3% to 6% objective range in the second quarter.
Governor Lesego Moseki attributed the expected breach mainly to fuel price increases linked to the conflict in Iran, together with higher public transport fares and medical aid premiums. The Bank forecast average inflation of 8.7% in 2026, easing to 5.6% in 2027, and said it needed to “recalibrate and reinforce policy transmission and signalling”.
Commercial banks raised prime lending rates in step. For borrowers on variable-rate facilities the increase added two percentage points to the cost of debt overnight.
The hike was the first change since the easing cycle that had brought the rate down to 3.5%, and it reversed the whole of that easing in one move.
What this means for you
- Re-forecast interest cost on every variable-rate facility and check loan covenants.
- IFRS 9 lenders should revisit macro-economic overlays and probability-of-default assumptions.
- Businesses with pricing power should review price lists; those without should model margin compression.
If any of these points apply to your organisation, talk to us. We will tell you what needs to change and what it will take.
Bank of Botswana: Monetary Policy Committee decision, 30 April 2026
Published 30 April 2026. This article is general information, not advice for a specific situation.