Bank of Zambia Keeps Policy Rate Unchanged at 15.50%

Lusaka, Zambia, Capital Markets in Africa — The Bank of Zambia Monetary Policy Committee (MPC), at its meeting on 11 February 2016, decided to maintain the Policy Rate at 15.5% partly to address volatility in FX market, Bank of Zambia Governor Denny Kalyalya stated at presentation in capital, Lusaka.

The MPC noted that although the annual rate of inflation at 21.8% in January 2016 was significantly above single digits, previous measures to tighten monetary policy and address volatility in the foreign market are taking effect.  

Depreciation of kwacha in large part driven by excess liquidity; that was feeding into inflation which was against bank’s objective of price, financial system stability. 2015 GDP growth seen at 3.6% vs 4.9% in 2014; real GDP growth projected to ‘improve marginally’ in 2016, Bank of Zambia stated. Annual inflation to rise further during 1Q, stabilise in 2Q, ‘decelerate sharply’ from 3Q onwards, Kalyalya said.

Bank of Zambia ready to take ‘appropriate monetary policy measures’ to support price, financial system stability.