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Zambia’s central bank cut its monetary policy rate by 75 basis points to 13.5 percent, citing a sharper-than-expected decline in inflation, Governor Dr. Denny Kalyalya said on Wednesday.
Speaking at a media briefing in Lusaka, Kalyalya said the Monetary Policy Committee (MPC) made the decision after noting continued deceleration in inflation in the fourth quarter of 2025, faster projected movement toward the 6–8 percent target band, and the need to maintain an appropriate monetary stance.
Inflation fell to 11.2 percent in December 2025 from 12.3 percent in September and dropped sharply to 9.4 percent in January 2026, largely driven by a bumper maize harvest from the 2024/25 farming season and the appreciation of the Zambian Kwacha against major currencies.
The central bank now projects that inflation will enter the target band earlier than forecast in November 2025, reaching the lower bound by the second quarter of 2027. Average inflation is expected to be 6.9 percent in 2026, down from 7.6 percent previously forecast, and 6.3 percent in 2027.
“The more positive outlook largely reflects the lagged effects of the recent currency appreciation and expected favourable agricultural output,” Kalyalya said.
Downside risks to inflation include continued favourable weather, supportive external conditions such as higher copper prices, and ongoing macroeconomic stability.
Kalyalya said future decisions on the policy rate would continue to be guided by inflation outcomes, forecasts, and financial stability considerations.
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