BoZ Holds Policy Rate for the Second Time, Still Bearing Positive Impacts
The Bank of Zambia (BoZ) maintained the Monetary Policy Rate (MPR) at 14.5% for the second consecutive time, a move aimed at stabilising inflation trends in line with prevailing economic conditions.
The Monetary Policy Committee (MPC) highlighted that the decision reflects a balance between supporting credit flows to businesses and safeguarding against both domestic and global risks.
The unchanged rate continues to provide an accommodative stance for private sector investment and business activity, which are gradually picking up as the economy recovers.
So far, the 14.5% MPR has done some “heavy lifting” in anchoring inflation within the target bands, supporting short-term growth, and cushioning the economy from shocks such as oil price volatility, lingering spotlights of COVID-19 impacts and recovery, and to some extent tied to global uncertainty tied relating to the Russia-Ukraine conflict and other geopolitical tensions taking place across the globe.
At the same time, MPR underpins to the build-up of aggregate demand in terms of creating a precedence balanced on scale, as it helps sustain current recovery momentum.
Why It Matters:
The policy rate serves as a benchmark for lending costs in financial and non-financial institutions.
In practical terms, the loans and credit facilities available to households and businesses are pegged to this rate.
By holding at 14.5%, BoZ ensures relatively stable borrowing costs, which strengthens business activity, investment flows, and overall economic productivity.
