Lesotho’s external position remains strong, with Net International Reserves (NIR) standing at US$1,125 million as of 18 March 2026.
According to the Monetary Policy Committee (MPC) of the Central Bank of Lesotho (CBL) in its latest assessment, this is 30.9 per cent above the minimum threshold, showing import cover of 4.3 months.
The committee said fiscal policy, which often exerts pressure on reserves and the external sector, has remained contained, contributing positively to the preservation of the reserve buffers under Lesotho’s fixed exchange rate regime.
International reserves are expected to remain broadly stable, with the near‑term NIR outlook pointing to reserves above the target through September 2026. However, risks remain, including rand depreciation, and US tariff threats to Lesotho’s clothing and textile exports.
The CBL said annual headline inflation moderated to 2.7 per cent in February 2026, down from 3.4 per cent in January, while transport inflation declined in February. Food prices eased on improved cereal harvests. Medium‑term inflation outlook has however, been revised upward given risks from the oil price shock, potential El Niño conditions in 2027, and exchange rate volatility.
It also noted that private sector credit expanded in January 2026 with annual growth of 12.8 per cent. However, credit growth is projected to decelerate to 4.8 per cent by 2028 reflecting lower investment demand as LHWP II construction winds down.
