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National Bank of Ethiopia Keeps 16 Percent Policy Rate Amid Persistent Inflation

Borkena · 3 hours ago · Read the Full Story on Borkena
National Bank of Ethiopia Keeps 16 Percent Policy Rate Amid Persistent Inflation
AI SUMMARY

The National Bank of Ethiopia maintained its benchmark policy interest rate at 16 percent as annual headline inflation stayed above target at 14.9 percent in September 2026.

  • The National Bank of Ethiopia kept its benchmark policy interest rate at 16 percent.
  • Annual headline inflation stood at 14.9 percent in September 2026, remaining above the targeted single-digit threshold.
  • The central bank projects inflation will stay in double digits over the next six months due to Middle East tensions and global energy price volatility.
  • Food inflation dropped slightly to 14.8 percent in September 2026 from 15.1 percent in June 2026.
  • Non-food inflation accelerated from 12.2 percent to 15.1 percent during the same period, driven by energy tariffs, fuel costs, and transportation expenditures.
  • Domestic economic performance showed resilience with growth in cement production, electricity generation, steel manufacturing, tourism, and gold exports.
  • Base money grew by 87.2 percent annually at the end of September 2026, driven by central bank gold purchases expanding foreign exchange reserves and liquidity.
  • Broad money supply grew by 40.2 percent annually.
  • Yields on short-term government Treasury bills and interbank money market rates continued to fall due to surplus commercial bank liquidity.
  • The Monetary Policy Committee submitted three policy directives to the Board, including maintaining the 16 percent rate, targeted reserve requirements, and indirect monetary operations to absorb excess liquidity.
  • The Monetary Policy Committee will convene for its next regular review session at the end of January 2027.
Read the Full Story on Borkena
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