Botswana's central bank left its main lending rate unchanged on Thursday at its first monetary policy meeting of the year, saying inflation was expected to remain within its target range over the medium term.

The Bank of Botswana also held the rate at 1.90% at its last two meetings in November and December.

Inflation in the Southern African country quickened to 2.5% year-on-year in January, from 1.7% a month earlier.

The central bank's preferred inflation range is 3%-6% over the medium term.

"Inflation is forecast to remain within the objective range in the medium term, similarly ... businesses expect inflation to be within the medium-term objective range, suggesting that inflation expectations are well-anchored" central bank Governor Cornelius Dekop told a press conference.

"The economy is expected to operate below full capacity in the short term, even with a 3.3% growth (in 2025), and will recover only marginally in the medium term. This should not generate demand-driven inflationary pressures."

Botswana's economy is largely dependent on the export of diamonds, with a sharp downturn in global demand for the precious stone triggering an economic contraction last year.

But the government hopes the economy will rebound this year because of an improvement in the global diamond market and a better performance in other sectors.