Addis Ababa — Ethiopia’s central bank kept its benchmark interest rate unchanged at 15% and opted for only a cautious loosening of credit growth limits, signaling that policymakers remain focused on containing inflation even as the economy shows signs of broad-based strength.
The Monetary Policy Committee (MPC) of the National Bank of Ethiopia (NBE), which met for the fourth time on September 15, said that while price pressures have eased steadily over the past year, inflation remains well above the single-digit target. The decision underscores the balancing act facing policymakers: sustaining economic momentum and managing banking-sector liquidity while safeguarding price stability.
Inflation Slows, but Target Still Elusive
Headline inflation cooled to 13.6% in August 2017 from 18.8% a year earlier. Food-price growth dropped sharply to 12.7%, helped by improved agricultural productivity and government price-stabilization measures. Non-food inflation, however, crept up to 15.1%, reflecting the lingering effects of foreign-exchange market pressure and imported input costs.
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