The Governor of the Bank of Zambia, Denny Kalyaya announced in a media briefing that the Bank policy rate has been reduced by 150 basis points to 14% from 15.5%. This follows an easing inflation trend and improved monetary fundamentals observed recently. Zambia kept its rate at 15.5% for 15 months as part of a tight monetary policy to curb the currency slide in 2015/2016 fiscal year. The BOZ in November hiked the benchmark rate 300bps to 15.5% in response to a volatile Kwacha.
“It’s a good step in the right direction as this should signal reduction in the cost of funds and lending,” Ngwenyama Rampitsang an Money Market Analyst for Africa Business Times said in a email to clients today 22 Feb. With market liquidity of over K1billion, inflation of 7%, stable currency exchange rate, healthy copper price of $6,080 per metric ton and falling treasury bill rates, it was inevitable to extend the benefits to the domestic credit market. This will assist stimulate economic growth which has compressed over the last 2 years, she said.
More articles on BOZ monetary policy.