Eswatini holds discount rate, flags global risks

Central Bank of Eswatini Governor Phil Mnisi updated media on global and domestic economic developments, confirming the discount rate remains at 6.75 percent. He also detailed intensified support for Eswatini Bank's transformation program.

Eswatini economy shows resilience amid inflation

The Eswatini economy demonstrated resilience in late 2025, with real Gross Domestic Product growing by 5.7 percent year-on-year in the fourth quarter.

Despite this momentum, headline consumer inflation increased to 2.0 percent in April 2026, driven by housing, utilities, and transport costs.

The Central Bank of Eswatini (CBE) has revised its short-to-medium-term inflation forecasts upward, projecting an average of 3.31 percent for 2026 and 3.74 percent for 2027, primarily due to elevated global oil prices and geopolitical uncertainties.

In response, the Bank maintained its discount rate at 6.75 percent, adopting a cautious approach to monitor the impact of the Middle East crisis.

Private sector credit expanded modestly by 0.9 percent to E23.2 billion by March 2026, with business sector credit showing a strong 2.6 percent increase.

The banking sector remains stable and adequately capitalized, with non-performing loans improving to 6.8 percent.

Global risks and Eswatini Bank's overhaul

The global economic environment remains challenging, with the International Monetary Fund (IMF) projecting 3.1 percent global growth and 4.4 percent inflation for 2026, primarily due to persistent conflicts and elevated energy prices.

Domestically, the Central Bank of Eswatini (CBE) is actively supporting Eswatini Bank through a structured transformation program.

This initiative aims to bolster the bank's balance sheet, corporate governance, and risk management.

An experienced consultant, who began work on April 1, 2026, is providing strategic and technical guidance to ensure the bank's financial sustainability.

The CBE reassures the public of Eswatini Bank's continued role as a development-oriented financial institution.

Balancing stability with global storms

The Central Bank of Eswatini navigates a complex environment, demonstrating domestic resilience while confronting significant external risks.

Its proactive intervention in Eswatini Bank highlights a hands-on commitment to financial sector stability and institutional strengthening.

However, the upward revision of inflation forecasts and the cautious stance on the discount rate underscore the ongoing need for vigilance amidst global uncertainties.