The Central Bank of Botswana held its benchmark interest rate steady at 3.5% during its meeting held on December 4, 2025, to support domestic economic activity. This follows a 160-basis-point hike in October, intended to reduce the gap between the central bank rate and commercial lending rates. Falling diamond exports have continued to weigh on the economy, while also reducing foreign currency inflows, tightening liquidity, and prompting banks to raise lending rates. The economy of Botswana plunged by 5.3% year-on-year in Q2 2025, extending the downturn into a sixth consecutive quarter. The annual inflation rate in Botswana quickened for the third month to an over one-year high of 3.9% in October 2025, from 3.7% in September, still within the central bank's 3%-6% target range.