Central banks in Botswana and Kenya maintain interest rates

Central banks in Botswana and Kenya have opted to maintain their benchmark interest rates as they navigate varying inflationary pressures and economic growth challenges.

The Bank of Botswana held its Monetary Policy Rate at 5.5% on August 27, 2026. While headline inflation fell from 10.7% in June to 9.4% in July due to lower domestic fuel prices, it remains above the bank’s target range of 3% to 6%. The bank expects inflation to stay above target until the first quarter of 2027, citing risks such as electricity costs and geopolitical developments. Botswana's economy has shown subdued performance, with real GDP growing only 0.2% in the year leading to March 2026, and the banking sector experiencing a contraction in commercial credit.

In Kenya, the Central Bank of Kenya maintained its Central Bank Rate at 8.75% during its August 11, 2026, meeting. This follows a previous reduction in February 2026. The decision aims to balance economic activity with inflation expectations. Kenya’s inflation rate was reported at 6.6% in August 2026. Policymakers noted that while credit conditions are improving, global energy price volatility and Middle East conflicts remain significant external risks to price stability.