Ethiopia holds rate at 15% as inflation eases but stays above target
- The National Bank of Ethiopia kept its benchmark rate unchanged at 15% after the MPC meeting on September 25, 2025.
- Headline inflation slowed to 13.6% in August, down from 18.8% a year earlier, due to lower food prices.
- Non-food inflation edged up to 15.1%, influenced by exchange rate pass-through effects.
The decision of the National Bank of Ethiopia to maintain the benchmark rate reflects a cautious approach amidst fluctuating inflation rates. While the increase in the credit growth ceiling is a positive step, the bank's emphasis on maintaining tight monetary conditions suggests a need for further economic stability before any significant policy shifts can be made. This cautious stance may be prudent, but it also highlights the challenges faced by the Ethiopian economy in achieving its inflation targets.
