GABORONE, Oct. 9 (Xinhua) -- Botswana's central bank has cut the bank rate by 50 basis points, down from 4.25 percent to 3.75 percent, after a Monetary Policy Committee (MPC) meeting on Thursday in the capital, Gaborone.
Moses Pelaelo, governor of the Bank of Botswana, said the current state of the economy and the outlook for both domestic and external economic activity provide scope for further easing monetary policy to support domestic economic activity.
"Accordingly, the MPC decided to reduce the bank rate by 50 basis points to 3.75 percent," he said.
Commercial banks are required to make the necessary interest rate adjustments with immediate effect to reflect this policy decision, Pelaelo said.
The COVID-19 pandemic and consequent containment measures have severely throttled economic activity globally and domestically as production, supply chains, project implementation and provision of goods and services are constrained, he said.
However, the MPC noted, the short-term adverse developments in the domestic economy occur against a potentially supportive environment, including accommodative monetary conditions, reforms to further improve the business environment and concerted efforts by the government to mitigate the impact of COVID-19.