The Bank of Zambia lowered its benchmark lending rate by 25 basis points to 13.25% on Wednesday. The move aims to support economic growth as domestic price pressures continue to moderate within target levels.
Governor Denny Kalyalya confirmed the Monetary Policy Committee acted after annual inflation fell to 6.8% in April. This marks the third consecutive reduction in the current easing cycle, following a 75-basis-point cut in February.
The central bank expressed confidence that inflation will remain within the 6%–8% target range. Improved agricultural yields and a stable Kwacha have provided the necessary room for this cautious monetary expansion.
However, policymakers warned of significant external threats stemming from the ongoing conflict involving Iran. These geopolitical tensions have triggered global supply chain disruptions, particularly affecting the landing costs of imported fuel and fertilizer.
To buffer the economy against these shocks, the Zambian government recently extended the suspension of fuel taxes. These fiscal measures are designed to complement the central bank’s efforts in maintaining price stability.
