Madagascar central bank holds key rate at 12.50%
The Bank of Madagascar will maintain its benchmark interest rate at 12.50% for three months to combat rising inflation.
The Central Bank of Madagascar (BFM) decided to keep its benchmark interest rate at 12.50% following a monetary committee meeting on Tuesday, November 3, 2026. This decision, effective November 4 for three months, aims to continue fighting inflation which is impacting household purchasing power and economic activities.
The BFM's monetary policy report on November 3 stated that maintaining this rate will help keep monetary conditions restrictive enough to gradually bring inflation back to its 5% medium-term target. Annual inflation rose to 8.6% in September from 6.8% in March, driven by food and energy prices.
The central bank forecasts inflation could reach 9.3% in December 2026 before slowing in the second quarter of 2027. This sustained high rate may increase borrowing costs for Malagasy businesses, particularly SMEs needing finance for investments, and could also make credit less accessible for households.
Why it mattersMalagasy households and businesses face continued high borrowing costs and persistent inflation impacting their finances.