By 
The Bank of Zambia (BoZ) is expected to announce its latest monetary policy rate decision on Wednesday as the country’s annual inflation continues to ease, bolstering expectations of further policy loosening.
Zambia’s consumer inflation fell to 9.4 percent year-on-year in January, down from 11.2 percent in December, marking a return to a downward trajectory largely driven by a firmer Kwacha that has helped lower the cost of imported goods.
Economists say the continued slowdown could give the central bank room to extend its easing cycle, following a 25-basis-point cut in the fourth quarter of 2025 that lowered the Monetary Policy Rate (MPR) to 14.25 percent.
BoZ Governor, Denny Kalyalya, said at the previous policy briefing that the committee opted to trim the rate as inflation showed sustained signs of moderation.
Read more: BoZ may hold policy rate at 14% as inflation remains unchanged in January, say analysts
“The Committee decided to lower the MPR in view of the decline in inflation,” Kalyalya said at the time.
He noted that inflation fell sharply in the third quarter, dropping to 12.3 percent in September from 14.1 percent in June, and eased further to 11.9 percent in October as the Kwacha strengthened and a bumper maize harvest pushed down food prices.
Despite the recent gains, Kalyalya cautioned that inflation remains above the bank’s target range and that market expectations are still elevated.
“This notwithstanding, the Committee was also mindful that inflation is still above the target band and market expectations of inflation remain elevated,” he said.
The BoZ has revised its 2025 inflation outlook upward to an average of 13.8 percent, from an earlier forecast of 13.3 percent.
With inflation now back in single digits for the first time in months, markets and businesses are watching closely for signs of whether policymakers will deliver another rate cut to support growth in an economy still recovering from successive price shocks.
WARNING! All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express permission from ZAMBIA MONITOR.
Comments