Inflation Trends, Cooling Down Policy Rate
The decision by the Bank of Zambia (BoZ) to reduce the Monetary Policy Rate (MPR) to 14.25% reflects a cautious but positive shift aimed at stimulating economic activity while maintaining price stability.
This adjustment comes as inflationary pressures begin to ease, largely supported by a stronger Kwacha, improved food supply and reduced import costs.
The Kwacha’s recent appreciation has been anchored on increased foreign exchange inflows from mining exports, reduced dependency on fertilizer imports following the commissioning of the urea plant and improved investor confidence due to progress in debt restructuring.
These developments have created room for a mild easing of monetary conditions without undermining macroeconomic stability.
This policy action is expected to enhance credit access, particularly for small and medium enterprises, agriculture and manufacturing sectors, which are central to driving inclusive growth. It also signals confidence in the broader economic reforms that continue to underpin Zambia’s recovery trajectory.
Overall, the reduction to 14.25% marks a measured step toward supporting sustainable growth, improving market liquidity and reinforcing the country’s economic resilience as we close the year.
