MBABANE – The cost of borrowing is set to rise for households and businesses after the Central Bank of Eswatini (CBE) increased its discount rate by 25 basis points to 7.00 per cent.
The increase, effective from yesterday, was widely expected by economists and brings the discount rate back to the level at which it stood before the May 2025 reduction, when it was lowered from 7.00 per cent to 6.75 per cent.
In its Monetary Policy Statement issued on Friday, CBE Governor Dr Phil Mnisi said the decision was taken after considering global, regional and domestic economic developments, alongside the Bank’s mandate to maintain price and financial stability.
The CBE said commercial banks are expected to increase the prime lending rate on loans extended to individuals and businesses to 10.50 per cent until the next monetary policy meeting.
The latest decision marks the first increase in Eswatini’s discount rate since May 2025, when the CBE reduced the rate from 7.00 per cent to 6.75 per cent.
The rate subsequently remained unchanged for more than a year before Friday’s decision.
For borrowers, the immediate significance is that the cost of servicing loans linked to variable interest rates is likely to increase as commercial banks adjust their lending rates.
This could affect households with mortgages, vehicle finance, personal loans and other credit facilities, while businesses could face higher financing costs on working-capital facilities, overdrafts, expansion loans and other forms of borrowing.
The increase comes against a backdrop of continued expansion in private-sector credit.
According to the CBE, credit extended to the private sector increased by 0.2 per cent month-on-month to E23.8 billion in July 2026.
Credit to households and non-profit institutions serving households increased by 0.6 per cent to E10.0 billion, while credit extended to businesses stood at E12.9 billion on a year-on-year basis.
Overall private-sector credit extension was 11.4 per cent higher year-on-year.
The higher interest-rate environment therefore comes at a time when businesses and consumers are already making significant use of credit.
