Central Bank holds repo rate amid policy uncertainty

News Ryan Hamilton-Davis 23 Hrs Ago

Central Bank Governor, Larry Howai -

DESPITE growing uncertainty in policies, the Central Bank has held the Repo rate at 3.50 per cent, which has remained unchanged since March 2020.

The Central Bank made the announcement in its Monetary Policy Report for November 2025.

The report said diminished confidence and growing policy uncertainty globally have caused economic prospects to wane and financial conditions to tighten.

It said the International Monetary Fund’s October 2025 World Economic Outlook noted a slowing in expansion of world output, predicting global output to expand by 3.2 per cent in 2025, 0.1 percentage points lower than the year before.

Energy commodity prices have continued to be affected by softer demand and a higher supply.

The report said crude oil prices fell sharply between June and October 2025 as trade tensions and oversupply dampened market fundamentals. It noted that the average West Texas Intermediate and Brent crude oil prices fell by 13.9 per cent year on year to an average of US$66.56 per barrel during the five-month period.

Natural gas prices in both the UK and Asian markets also fell by 8.4 per cent year on year, bringing the natural gas basket price to US$11.53 per mmbtu.

However, thanks to first gas from bpTT’s Cypre and Mento fields, the domestic energy sector is expected to stabilise in the short to medium term.

Still, because of the shutdown of Nutrien, the Central Bank has predicted that downstream energy sector output may be constrained.

Activity in the non-energy sector also seems to be losing momentum, Central Bank said. It noted that movements in leading indicators such as cashless payments continue to grow at a much slower pace, while short to medium-term labour market conditions face more pressure because of local policy developments.

“The closure of major state employment programmes, including Cepep and URP, has eliminated a significant source of jobs for thousands of low-skilled workers, who may find it difficult to secure employment in other sectors. On the other hand, Government’s plan to fill long-standing vacancies in the public service and transition from contract-based employment could support employment stability and bolster demand in the long-run,” the Central Bank said.