Price stability is the ultimate goal of monetary policy in many jurisdictions around the world. In environments of free capital flows, such as the Common Monetary Area (CMA), fixed exchange rate has been used as an anchor of monetary policy.

The Central Bank of Lesotho’s (CBL’s) primary mandate, as spelled out in Section 5 of the Central Bank of Lesotho Act of 2000, is to achieve and maintain price stability [in Lesotho]. This objective is achieved by ensuring the peg between the Loti and the South African Rand (Rand). This is a form of a “soft” fixed exchange rate regime, were the country’s currency is pegged to the currency of one country. Exchange rate targeting is a monetary policy strategy aiming for a given (usually a stable or even fixed) exchange rate against another currency or group of currencies. It can therefore be stated that the CBL pursues an exchange rate targeting monetary policy framework.

The peg between the Loti and the Rand is attained by maintaining net international reserves (NIR) at a level that is sufficient to guarantee that for every Loti issued there is basket of foreign currency equivalent reserves. This is the level that underwrites the peg.

The Bank operationalizes the monetary policy decision through conduct of open market operations (OMO)which influences the short term interest rates with a view to align them with those in the CMA albeit with an allowable deviation margin. This is to curb, as far as possible, the capital outflows as domestic comparable rates are expected to enhance the attractiveness of the Government of Lesotho securities relative to their counterparts in the CMA sub-region.

The OMO is conducted bi-weekly, preceded by forecasts of liquidity conditions in the economy. Conditions of excess liquidity lead to capital outflows which puts pressure on the reserves. The OMO therefore is ultimately aimed at alleviating that pressure which if left unchecked may threaten the level of NIR and by implication the peg between the Loti and the Rand.

The other tool of monetary policy is the CBL Rate, which is the reference rate that anchors all other rates in the banking sector. The CBL Rate is also set in alignment with the rates in the CMA, again with some allowable deviation margin. The argument for this broad alignment is still to curb the capital flows to the extent possible.

Dr. Emmanuel Maluke Letete
PhD (Economic Science, Financial Economics, Political Economy and Institutional Economics)

Mr. Powell Lehlomela Mohapi
1st Deputy Governor
MSc (Economics & Econometrics)

2nd Deputy Governor


Mr. Rets'elisitsoe Thamae
Non-Executive Director
MA (Economics)
Dr. Ratjomose Machema
External Member
PhD (Economics)
Mr. Mats'abisa Thamae
Director of Financial Markets
MM (Finance & Investment)
Dr. Tanka Tlelima
Director of Research & Secretary
PhD (Economics)

Tue 30 Jan 2024
Tue 02 Apr 2024
Tue 04 Jun 2024
Tue 23 Jul 2024
Tue 24 Sep 2024
Tue 26 Nov 2024


Since the September 22 meeting of the Central Bank of Lesotho’s (CBL’s)Monetary Policy Committee (MPC), the COVID-19 pandemic has continued to take
its toll on the world, unleashing devastating human and economic suffering. While progress attained in November towards a vaccine bodes well for growth in the
medium term, the global economic downturn in the wake of the virus remains severe and broad based across all economic sectors, affecting advanced,emerging as well as developing economies. A return to pre-pandemic levels of economic growth is likely to take a number of years. The most recent global growth forecasts from the International Monetary Fund (IMF)1 expect global growth to contract by 4.4 per cent in 2020 compared to an earlier projection of 4.9 per cent in June 2020 . Similarly, growth in sub-Saharan Africa is expected to decline by 3.0 per cent in 2020 relative to June 2020 projection of 3.2 per cent.


Financial Indicators

17 May 2024

Loti / US Dollar       18.1586
Loti / Euro 19.7259
Loti / Pound 22.9958
Loti / SDR 25.2776


Monthly Inflation (%) 2023 to 2024

Net International Reserves