In a decisive move reflecting cautious economic stewardship, the Central Bank has maintained its Repo rate at 3.50 percent, marking an unprecedented period of monetary policy stability that has persisted since March 2020. This significant decision was formally announced in the institution’s November 2025 Monetary Policy Report, released under the guidance of Central Bank Governor Larry Howai.
The comprehensive report paints a complex picture of the global economic landscape, highlighting how diminished international confidence and escalating policy uncertainties have collectively contributed to weakening economic prospects and tightening financial conditions worldwide. These findings align with the International Monetary Fund’s October 2025 World Economic Outlook, which projects global output expansion to moderate to 3.2 percent in 2025—a slight 0.1 percentage point decrease from previous year’s performance.
Energy markets have experienced substantial volatility, with crude oil prices undergoing sharp declines between June and October 2025. Trade tensions and market oversupply fundamentally undermined pricing structures, resulting in West Texas Intermediate and Brent crude oil averages falling by 13.9 percent year-on-year to settle at US$66.56 per barrel. Parallel declines affected natural gas markets, with UK and Asian prices dropping 8.4 percent annually to establish a natural gas basket price of US$11.53 per mmbtu.
Despite these challenging global headwinds, the domestic energy sector shows promising signs of stabilization in the short to medium term, primarily driven by the commencement of gas production from bpTT’s Cypre and Mento fields. This positive development, however, is tempered by concerns regarding downstream energy output constraints following the shutdown of Nutrien operations.
The non-energy sector demonstrates concerning signs of deceleration, with leading indicators such as cashless payments growth showing markedly slower momentum. Labor market conditions face additional pressure due to recent policy developments, particularly the closure of major state employment programs including CEPEP and URP. These closures have eliminated crucial employment opportunities for thousands of low-skilled workers who may encounter significant challenges transitioning to other sectors.
Conversely, the Central Bank notes potential long-term benefits from government initiatives to fill longstanding public service vacancies and transition from contract-based employment arrangements. These measures could ultimately enhance employment stability and strengthen domestic demand patterns over extended time horizons.