Regulating demand and preventing inflationary trends

In a recent statement, the Banky Foiben’i Madagasikara (BFM) confirmed that conditions for easing its monetary policy have not yet been met.

The BFM highlighted last August that inflation has remained persistent since the beginning of the year, impacting purchasing power and complicating economic stimulation efforts. As the country’s monetary authority, BFM is committed to managing inflationary pressures. During a press briefing, BFM Governor Aivo Andriana-rivelo explained that the decision to maintain restrictive monetary conditions aims to regulate demand and curb potential inflationary trends.

The bank’s strategy notably supports public and private investment projects to boost supply and foster sustainable economic growth. In its economic report published yesterday, BFM disclosed that inflation had intensified to 7.8 % over the past year. Looking ahead, BFM forecasts indicate that year-end inflation for the entire basket is expected to reach 8.2 % by December 2024.

To maintain a cautious approach, the BFM’s Monetary Committee has decided to keep its permanent facility rates unchanged, with deposit facilities at 9.5 % and marginal lending facilities at 11.5 %. This means that banks depositing excess liquidity with the BFM will receive a 9.5 % return, while those seeking loans from the central bank will incur an 11.5 % rate.