CBE TO ESTABLISH INDEPENDENT MONETARY POLICY COMMITTEE

NKONYENI – The Central Bank of Eswatini (CBE) is set to undergo a significant transformation in its monetary policy governance framework.

This comes as the bank prepares to transition from the current Monetary Policy Consultative Committee (MPCC) to a fully-fledged Monetary Policy Committee (MPC), aligning with global best practices.

This development was announced during a media engagement held last Thursday at Nkonyeni Golf Estate, where CBE Governor Dr Phil Mnisi explained that the transition will be underpinned by a Bill currently being proposed in Parliament.

“The establishment of the Monetary Policy Committee will introduce a more structured and transparent process in setting the monetary policy stance,” said Dr Mnisi.

“This committee, which will include the governor and other key members, will have the authority to vote on monetary decisions.

Transparency

In some jurisdictions, they even go as far as publishing the minutes of their meetings, which enhances transparency and accountability.”

The governor added that this change is expected to improve the independence and credibility of the bank’s policy decisions, further solidifying investor confidence in Eswatini’s financial sector.

Dr Mnisi also took the opportunity to dispel a common misconception that Eswatini merely mirrors South Africa when announcing its monetary policy decisions.

“There is a very deliberate and thorough process that takes place before we announce any stance,” he said.

“We don’t simply copy South Africa.”

He outlined four key considerations that guide the Central Bank’s decisions:

1. Internal expert consultations: Directors from Research, Financial Regulations and Banking and Currency operations form a high-level think tank to assess a wide range of data—local, regional and international—to understand economic trends and forecast potential impacts.

2. Local economic indicators: The team pays close attention to domestic economic data, which acts as a critical barometer in determining the most suitable policy direction for the country.

3. Regional and global interdependence: Recognising that Eswatini operates within a broader economic landscape, the bank analyses the movements and policy decisions of key trading partners to understand potential spill-over effects.

4. Impact assessment: Before finalising any decision, the bank evaluates the implications of its policy choices on the country’s financial sector liquidity, the regulatory environment and the overall economy.

The governor emphasised that these rigorous internal processes ensure that the bank’s decisions are tailored specifically to the needs and conditions of Eswatini, even as they remain mindful of regional economic dynamics.

“The goal is to ensure that our monetary policy is not only responsive, but also forward-looking and grounded in solid economic analysis,” he said.

This upcoming transformation marks a critical step forward in the evolution of Eswatini’s monetary policy architecture, reflecting a growing emphasis on autonomy, transparency and data-driven decision-making.

Post your comment

Your name:

Your e-mail address:

Add your comments:

Please enter the code you see in the image:

Image:

Code: