The National Bank of Ethiopia (NBE) has announced its decision to maintain its benchmark National Bank Rate (NBR) at 15 percent, following a meeting of its Monetary Policy Committee (MPC) on March 25, 2025.
The central bank’s decision comes as it navigates a complex economic landscape, characterized by moderating but still elevated inflation. The MPC cited a February 2025 inflation rate of 15 percent, a decline from previous months, as a key factor in its assessment. Food inflation was reported at 14.6 percent, while non-food inflation stood at 15.6 percent.
The bank also noted positive economic indicators, including continued growth in economic activity, as indicated by its Composite Index of Economic Activity (CIEA), and a projected record harvest due to favorable weather conditions. Monetary aggregate growth was also highlighted, with broad money increasing by 22.8 percent and base money by 42.0 percent as of January 2025.
Interest rates in the Treasury Bill market saw the 364-day yield rise to 17.7 percent, while the inter-bank money market rate reached 16.7 percent. The NBE also reported a stable banking sector, although liquidity challenges were noted in some segments.
The MPC acknowledged improvements in the external sector, including growth in exports, remittances, and capital inflows, resulting in a current account surplus and increased foreign exchange reserves. Global economic projections from the IMF were also considered, with global growth expected to remain steady.
In addition to maintaining the NBR, the NBE will retain the 18 percent cap on annual credit growth and existing rates for its Standing Deposit Facility, Standing Lending Facility, and reserve requirements on bank deposits.
The central bank emphasized its commitment to achieving single-digit inflation over the medium term and stated that future monetary policy decisions will depend on inflation outturns and broader economic developments. The next MPC meeting is scheduled for the end of June 2025.
