Zambia: BoZ cuts benchmark interest rate to 14 percent

Feb 28, 2017

The interest rate was reduced to 14 percent from 15.5 percent.

Following a significant reduction in annual inflation rate, the Bank of Zambia (BoZ) has cut the benchmark lending rate to 14 percent respectively. The Governor of the BoZ, Denny Kalyalya made this known while speaking to reporters during a press briefing last Wednesday. The Monetary Policy Committee (MPC) decided to reduce the rate by 150 basis points to 14 percent from 15.5 percent due to the single annual inflation rate witnessed in the country in recent months. The BoZ Governor said the reduction was due to low and sluggish economic growth and the prevailing high interest rates that are constraining access to credit by the productive sectors of the economy. "Changes in the policy rate will be guided by inflation outcomes and forecasts as well as progress in fiscal consolidation," he stated. Year-on-year inflation for January 2017 reduced to 7.0 percent from 7.5 percent recorded in December 2016.