The Monetary Policy Committee (MPC) of the Central Bank of Lesotho (CBL) held its 106th meeting to deliberate on the latest global, regional and domestic economic developments as well as the developments in the financial markets in Maseru.
According to the CBL Governor, Dr Emmanuel Maluke Letete, the committee noted that the global economic projections have been updated in the January 2024 World Economic Outlook.
He said the global economy is expected to grow by 3.1 percent in 2024 and 3.2 percent in 2025 and that the Monetary Policy Committee decided to leave the CBL rate unchanged at 7.75 percent per annum.
Dr Letete stressed that amongst other things, this economic growth is influenced by the economic growth that was not expected in the United States in the second half of the year 2023 and the growth influenced by the economic growth in developing countries around the world.
“This means that the world’s economy has improved compared to the previous meeting of the committee in January,” he said.
He said the pillars of this global economic growth are high spending on governments and the public, manufacturing, tourism and construction.
However, he noted that Lesotho’s economic conditions have dropped significantly compared to where they were at the committee seat in January.
“The situation was brought about by the low demand for goods in the country, the decline in construction, transport and public financial services,” said Dr Letete.
He added that costs fell to 7.3 percent in February from 8.2 percent in January and this has been a major obstacle to cost reduction in food, alcoholic and non-alcoholic beverages and tobacco.
He stressed that after this study, MPC reached the international financial assets, changing the amount of assets that was at $750 million in January this year.
“This is the minimum to keep the Loti (M) equal to the South African Rand (R),” he mentioned.
Dr Letete said global growth is expected to pick up in 2024 but risks to the outlook linger in the medium term and domestic economic activity is expected to pick up in the medium term.
The Monetary Policy Committee will continue to closely assess the global economic developments and their impact on the domestic economy, especially the Net International Reserves (NIR) and respond accordingly.
Source: LENA 03/04/2024
