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True to market intelligence, and as exclusively reported by Zambia Monitor, the Bank of Zambia (BoZ) has held its benchmark lending rate at 14.5 percent, citing easing inflation and improved financial stability.
In a report published earlier, Zambia Monitor had hinted that the Bank of Zambia (BoZ) was expected to hold its benchmark interest rate at 14.5 percent when the Monetary Policy Committee (MPC) announces its decision on Wednesday, quoting Lusaka-based economist, Kelvin Chisanga.
Governor Denny Kalyalya told a media briefing in Lusaka on Wednesday that inflation fell from 16.5 percent in March to 13 percent in July, driven by improved maize supply, lower fuel prices, and a stronger Kwacha.
“Energy prices have been coming down, with the Energy Regulation Board maintaining prices last month. We expect oil prices to remain subdued, meaning they could go up or down, but not drastically,” Kalyalya said.
Read more: Economist, Chisanga, sees flat monetary policy rate as Bank of Zambia prepares MPR decision
He credited a combination of government reforms and BoZ measures since 2021 for contributing to the improved macroeconomic indicators.
However, Kalyalya cautioned that inflation remained above the six to eight percent target range, while risks linked to global trade policies and persistent geopolitical tensions still pose challenges.
The central bank projects that inflation will fall within the target range in the first quarter of 2026, supported by monetary policy measures, structural reforms, and stable energy prices.
Expected gains from copper exports, subdued oil prices, and progress in debt restructuring are seen as key factors in sustaining the downward trend.
Economist, Kelvin Chisanga, had advised that the central bank should use the opportunity to send a clear signal on when and how it might begin easing monetary policy.
Chisanga argued that the current policy stance was still yielding positive results and should be maintained in the short term, with any shift towards lower rates tied to sustained macroeconomic stability.
“I think the current policy framework is still bearing good effects, and it will be absolutely important to maintain given the circumstances slightly ahead of us,” Chisanga said.
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