CBE repo rate up to 7.75% from 7.25%
IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIlI
MBABANE – There is some good news for emaSwati. The Central Bank of Eswatini (CBE) has increased the repo rate by 50 basis points, which means an increase from 7.25 per cent to 7.75 per cent.
The good news is that in comparison to the interest rate of the neighbouring South Africa (SA), this is good news as Eswatini’s interest rate is lower by one per cent.
A repo rate is the rate at which a central bank lends money to commercial banks in exchange of government securities. This is done to manage the money supply and control inflation. The repo rate is an important tool used by the central banks to influence economic growth.
Increased
Addressing journalists yesterday, the Governor of CBE, Dr Phil Mnisi, said that on the previous day, SA, increased the interest rate by 50 basis points.
He said the repo rate in SA was increased from 7.75 per cent to 8.25 per cent, adding that this was lower than the Eswatini rate.
Mnisi said the reason Eswatini maintained a lower rate in comparison to the neighbouring SA was to promote and sustain economic growth.
Noteworthy, Eswatini and SA currencies are on par.
Meanwhile, the governor also used the press briefing to advise members of the public to live within their means.
He said the bank was concerned with the rise of non-performing debts.
In layman’s terms, this refers to debts where borrowers were struggling to pay.
He said such debts amounted to E1.1 billion as of March 2023.
He also said the non-performing loan ration increased to 7.2 per cent in March 2023 from 6.6 per cent reported in February 2023.
ToTal
However, he said the total debt decreased by 1.8 per cent to E32.3 billion at the end of April 2023, from E32.9 billion.
Mnisi said this was equivalent to 39.8 per cent of the country’s gross domestic product (GDP).
During the briefing, the governor also said the economy recorded a growth of 3.8 per cent on year-on-year basis in the fourth quarter compared to a growth 6.9 per cent in the third quarter of 2022.
He also said consumer inflation rose to 6.1 per cent in April 2023 from 5.6 per cent in March. He said this emanated mainly from consistent rise in food prices as well as upward price adjustment for housing and utilities.
He said the bank revised its inflation focus to 5.7 per cent.