Ethiopia holds rate at 15% as inflation eases but stays above target

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The National Bank of Ethiopia (NBE) kept its benchmark rate unchanged at 15% after its Monetary Policy Committee (MPC) meeting on September 25, 2025, despite inflation remaining above its medium-term goal.

Headline inflation slowed to 13.6% in August, down from 18.8% a year earlier, driven by lower food prices. Non-food inflation, however, edged up to 15.1%, partly reflecting exchange rate pass-through effects.

The MPC said the disinflationary trend reflects tight monetary policy, improved agricultural output, and price adjustments. Month-on-month inflation eased to 1.1%, suggesting reduced price pressures.

While noting progress, the committee stressed that inflation is still above the target of single digits. It maintained a “prudent monetary stance” and signalled it would keep conditions tight until further progress is achieved.

In a step toward loosening controls, the MPC raised the credit growth ceiling from 18%  to 24% for FY 2025/26, but stopped short of fully removing it. The bank said careful calibration was needed to avoid destabilising the financial system.

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The decision comes just days after Nigeria’s central bank made its first rate cut in five years, trimming its benchmark to 27% as inflation eased to 20.12%. Ethiopia’s caution is in contrast to its peers, which are pivoting toward easing before considering rate cuts.

The next MPC meeting is scheduled for December 2025.

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