MBABANE - Indebted-consumers can breath a sigh of relief as the Central Bank of Eswatini (CBE) maintained its hawkish monetary policy stance on sticky inflation concerns.
Last Friday CBE Governor Dr Phil Mnisi said the bank with the Monetary Policy Consultative Committee (MPCC) has maintained the interest rate at 7.5 per cent. The governor stated that when keeping the interest rates steady, banks were, therefore expected to maintain the prime lending rate on loans extended to individuals and businesses at 11.0 per cent, until the next monetary policy meeting.
Dr Mnisi said the CBE expects the cost of goods and services to increase moderately in 2023. He noted that the bank revised down its inflation forecast to 4.93 per cent for 2023 and 4.68 per cent for 2024, risks to the inflation outlook for Eswatini continue to include supply chain disruptions, oil prices uncertainty and the possibility of drier weather conditions, which would affect food production. Mnisi said tighter monetary policy conditions continue to weigh down on global growth prospects. He said advanced economies were forecasted to grow by 1.5 per cent in 2023 and 1.4 per cent in 2024 while emerging markets and developing economies are expected to grow by 4.0 per cent in 2023 and 4.1 per cent in 2024. He said risks to the outlook remained elevated and persistent.
Uptake
The governor also highlighted that the non-performing loans (NPL) ratio currently stood at 7.3 per cent. He said keeping the interest rates steady was also meant to lessen the pressure on consumers especially to lending. Mnisi added that this had already created a positive uptake on lending and they were also hoping that it would also lessen the pressure on the repaying of loans. He said for the NPL ratio to remain high could have been caused by that consumers were already in tight position.
