BOZ Cuts Monetary Policy Rate by 2.5 Percent

Bank of Zambia Governor Dr. Denny Kalyalya has announced a 250-basis-point (2.5 %) reduction in the Monetary Policy Rate to 10.75 percent from 13.25 percent in the previous quarter.

Dr. Kalyalya has announced the decision during the second quarter Monetary Policy Rate announcement and press briefing in Lusaka on Wednesday.

He says the decision was mainly influenced by lower inflation, with annual inflation falling to 6.1 percent in September, as well as the outlook showing inflation is expected to remain within the target range.

Dr. Kalyalya says the reduction is also intended to better align the monetary policy stance with the inflation outlook and provide space for financial-sector players to review their lending rates.

He says this could allow economic players to improve their capacity and support economic activity.

Dr. Kalyalya has, however, cautioned that there are upside risks to the inflation outlook, which require a guarded approach to monetary policy.