Inflation to converge within range in H2

The central bank has revealed that inflation is expected to converge within range in the second half of this year, provided there is no unanticipated large increase in administered prices. The revelation was made in a statement that announced Bank of Botswana (BoB) monetary decision recently. BoB has come under pressure to trim inflation, which has been eluding the 3-6 percent medium target in more than two years.  Currently inflation stands at 7,4 percent after.

However, some analysts such as those at Motswedi Securities, a broking firm are not confident inflation will fall within target in the coming months. December inflation is expected to rise on the backdrop of increased transport fares.  On a related matter, the central bank’s Monetary Policy has retained bank rate at 9,5 percent at its meeting on the 24 December 2012. The rate has been kept steady for two years, further raising concerns on whether the bank is really taking into cognizance the current economic trends both locally and internationally.