The National Bank of Ethiopia (NBE) kept its key policy settings unchanged on Tuesday, opting to maintain a tight monetary stance as inflation eased into single digits, while cautioning that external shocks could threaten the fragile gains.
In a statement following its sixth Monetary Policy Committee (MPC) meeting, the central bank said annual inflation slowed to 9.7% in February 2026, extending a downward trend that has brought price growth into single-digit territory since December. The disinflation was driven by a combination of restrictive monetary policy, improved fiscal discipline and easing supply pressures.
Food inflation declined to 10.8% from 14.6% a year earlier, while non-food inflation slowed more sharply to 8.1%, indicating broad-based moderation in prices. Month-on-month inflation stood at 0.4% in February, suggesting that price pressures have continued to ease in recent months.
Despite the improvement, the MPC said a tight policy stance remains necessary to secure price stability. It decided to hold the policy rate and maintain existing credit growth caps, while signaling it stands ready to adjust its stance if risks materialize. The committee added it would review economic conditions more frequently and could reconvene before its next scheduled meeting if needed.
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