The Central Bank of Eswatini (CBE), Governor Dr. Phil Mnisi issued his Monetary Policy Statement(MPC) yesterday, announcing the decision to hold the discount rate steady at 6.75 per cent following a high-level meeting of the Monetary Policy Consultative Committee.
This move, an anchor for the nation’s financial system, directly influences the prime lending rate which remains fixed at 10.25 per cent.
For the average Eswatini entrepreneur or homeowner, this announcement provides a moment of predictability in a world currently defined by rapid market shifts and high-stakes geopolitical tension.
The decision was not made in a vacuum. Rather, it is a balancing act between fostering domestic growth and shielding the local economy from external shocks originating in more volatile global markets, according to Dr Mnisi.
On the international stage, the governor highlighted that economic momentum has remained somewhat subdued.
“On the global front, economic growth remains subdued amid heightened uncertainty, with advanced economies (AEs) showing slower momentum,” said Dr Mnisi.
“On a year-on-year basis, growth moderated in the fourth quarter of 2025, easing to 2.0 per cent from 2.3 per cent in the previous quarter in the United States. In the Euro Area, growth slowed to 1.2 per cent from 1.4 per cent, while in the UK it declined to 1.0 per cent from 1.2 per cent in the same period. Inflation has broadly moderated but remains above target in some economies, with US and UK inflation steady at 2.4 per cent and 3 per cent in February 2026, respectively”.
Major central banks in advanced economies are treading carefully as inflation begins to moderate but remains stubbornly above long-term targets.
The CBE is aligning itself with a global posture of watchful waiting. This is particularly important given that Eswatini’s real Gross Domestic Product (GDP) showed a remarkable acceleration of 5.8 per cent year-on-year in the third quarter of 2025.
“Growth was broad based across all the three sectors of the economy, anchored by a robust recovery in the primary sector, as well as the sustained momentum in the secondary and tertiary sectors”.
Maintaining the current interest rate environment ensures that this momentum isn’t prematurely stifled by rising borrowing costs, allowing local businesses the breathing room they need to reinvest and expand.
However, the Governor’s statement makes it clear that this stability is not a signal of complacency.
Credit extended to the private sector reached E18.1 billion by January 2026, depicting a month-on-month decline of 1.4 per cent.
“The monthly decline was broad based across most sectors of the economy.
On a year-on-year basis, private sector credit extension recorded a relatively healthy 5.3 per cent growth rate,” said Dr Mnisi.
The Bank is also keeping a close eye on the quality of these loans, noting that non-performing loans have actually declined by 11.6 per cent month-on-month and 18.0 per cent compared to the previous year, amounting to E1.2 billion in January 2026.
“The NPL ratio also improved, dropping by 0.7 percentage points month-on-month and by 1.8 percentage points year-on-year, reaching 6.0 per cent,” he said.
For now, the CBE’s steady hand offers a foundation of confidence, but the message remains that the road ahead requires a cautious and data-driven approach to stay on the path of sustainable recovery.