GABORONE, Aug 22 (Reuters) – Botswana’s central bank lowered its key lending rate for the second meeting in a row on Thursday, saying there was scope to ease monetary policy as the economy continued to operate below capacity.

Bank of Botswana lowered its Monetary Policy Rate by a further 25 basis points to 1.90% after reducing it by 25 bps in June.

In a news conference explaining the decision, central bank Governor Cornelius Dekop reiterated his previous comments that Botswana’s economy was forecast to operate below capacity in the medium term, failing to generate demand-driven inflationary pressures.

“As a result, the prevailing economic conditions and outlook provide scope for easing of monetary policy,” Dekop added. “Our aim is that this will assist in stimulating economic growth.”

The southern African country’s consumer inflation quickened to 3.7% year on year in July from 2.8% in June, but stayed within the Bank of Botswana’s 3% to 6% medium-term target range.

Inflation is expected to average 3.0% in 2024, Dekop said, down from 3.6% the bank forecast at its June meeting.

(Reporting by Brian Benza; Writing by Tannur Anders; Editing by Alison Williams, Bhargav Acharya and Toby Chopra)