Reading Time: 3 minutes The Central Bank of Eswatini (CBE) is standing firm on a cautious monetary policy stance as global inflationary shocks intensify.
CBE Governor Dr Phil Mnisi stressed that the bank is deliberately avoiding aggressive interest rate hikes, choosing instead a measured approach to shield households from rising costs.
“Through our monetary policy stance, we take a cautionary approach.
Instead of raising interest rates, we said let’s take a cautionary approach.
Through our monetary policy and policy formulation, that is how we respond to these global shocks and the inflationary pressures.
We use our tools and of course, taking into consideration that we are not operating in isolation,” he said.
The governor’s comments came after Eswatini Observer Editor Nomthandazo Nkambule asked the governor on what concrete tools beyond interest rates the bank was deploying, given the mounting imported inflation from global oil and food markets further intensified by the Middle East crisis.
This was during a media engagement themed ‘Coffee with the governor 2.0,’ held at the Sibebe Resort on Friday.
Last week, the governor announced that the CBE had decided to maintain the discount rate at 6.75% and not hike it despite the South African Reserve Bank (SARB) having increased interest rates by 25 basis points to 7%, with the prime rate rising to 10.5%.
He had said the reason not to hike was reached upon by the Monetary Policy Consultative Committee (MPCC), taking into consideration relevant global, regional and domestic economic factors, as well as the price and financial stability mandate.
Explaining further on Friday, the governor said the bank is closely monitoring the impact of the price shock and the Middle East crises.
As the bank has an MPCC to strengthen decision making, ensure diverse input and maintain credibility in monetary policy, Dr Mnisi said such a committee, though South Africa can....
