The central bank of Eswatini decided to lift its benchmark interest rate by 50 bps to 6.5% at its November 2022 meeting. This marks the fifth straight rate hike this year, bringing borrowing costs to the highest since February of 2020. Policymakers said that inflationary risks to the outlook remain elevated due to the higher inflation outlook in South Africa, the country's major trading partner, which could be passed to domestic inflation through imports, among others. The overall inflation eased to 5.5% in October from 6.7% in September and it is still seen at 4.8% in 2022. Meanwhile, the Bank revised higher the forecasts for 2023 to 5.5% (vs previous 5.3%) and for 2024 to 5% (vs previous 4.8%). The economic activity is estimated to have contracted by 1.6% year-on-year in the second quarter.
