Maseru – The Monetary Policy Committee MPC of the Central Bank of Lesotho CBL has decided to reduce the Bank’s rate by 25 basis points to 6.5 percent per annum.
CBL Governor Dr. Rets’elisitsoe Matlanyane revealed this when briefing the media on international, regional and domestic economic performances following the 66th MPC meeting held in Maseru on Tuesday.
She said the MPC‘s decision is derived from considering a number of developments, adding that the 2017/2018 National Budget proposes a lower fiscal deficit equivalent to 4.8 percent of Gross Development Product for the current fiscal year compared to the actual deficit of 7.8 percent realised in 2016/2017.
Dr. Matlanyane added that the year-on-year consumer inflation rate increased to 5.0 per cent in June 2017 compared with 4.4 per cent recorded in March 2017, saying this was due to increases in prices of food and non-alcoholic beverages, following an end of government subsidy on locally produced maize meal in May 2017.
She said the overall money supply fell by 0.9 per cent in May 2017 in contrast to a 10.9 per cent increase registered in March 2017, saying the decrease is attributed to a fall in the banking system net foreign assets, which more than offset the rise in domestic claims.
She noted that the official reserve coverage fell to 4.9 months of import cover at the end of March 2017 from 5.3 months in December 2016, while global economic growth rates are still generally lower than those in the pre-financial crisis period, averaging around 2 per cent for advanced economies and emerging markets averaging 4.5 per cent.
MPC continues to closely monitor the global and domestic economic developments.