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The Bank of Zambia (BoZ) is expected to announce its latest monetary policy rate decision Wednesday, with analysts predicting that the central bank will maintain the benchmark rate at 13.5 percent despite continued easing in inflation.
The anticipated announcement comes as Zambia records slower annual inflation, strengthening expectations for further monetary policy easing, although rising global and domestic risks are likely to keep the central bank cautious.
In February this year, the central bank reduced the monetary policy rate by 75 basis points from 14.25 percent to 13.5 percent after inflation decelerated faster than expected.
Speaking at the time, Bank of Zambia Governor, Denny Kalyalya said: ” the Monetary Policy Committee (MPC) resolved to lower the rate after observing sustained easing in inflation during the fourth quarter of 2025 and improved prospects of inflation moving toward the target range of 6 to 8 percent.”
Read more: Zambia cuts monetary policy rate to 13.5% as government cites sharp decline in inflation
Kalyalya said the committee also sought to maintain an appropriate monetary policy stance that would support macroeconomic stability while encouraging economic activity.
However, analysts believe the central bank may opt to leave the rate unchanged as policymakers weigh increasing risks to the inflation outlook, including geopolitical tensions, election-related spending, and the threat of another El Niño weather cycle that could affect agricultural production.
Meanwhile, copper prices on the London Metal Exchange (LME) surged last week, recording their strongest weekly gain since early October as markets responded to hopes of a possible de-escalation in the Iran conflict despite continued clashes near the Strait of Hormuz.
LME copper rose 1.3 percent to US$13,573 per tonne on Friday, its highest close since late January, while the metal gained more than four percent over the week alongside broader risk assets.
The rally was driven by improving investor sentiment toward industrial metals amid expectations of a possible peace deal, while ongoing supply concerns also supported prices.
Market concerns remain over disruptions to critical inputs such as sulphur used in copper and nickel production, as well as operational setbacks at major mines including PT Freeport Indonesia’s Grasberg mine, which is only expected to return to full production capacity in 2028.
Copper remains Zambia’s major export commodity and developments in global prices are closely watched due to their impact on foreign exchange earnings and overall economic performance.
Despite the recent gains, analysts have warned that copper prices could face downside risks later in the year if geopolitical tensions persist or intensify, potentially weighing on global growth and industrial demand.
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