LUSAKA, Feb 11 – Zambia’s central bank reduced its benchmark lending rate by 75 basis points to 13.50% on Wednesday, delivering a larger cut than analysts had anticipated as inflation shows signs of easing more quickly than previously projected.
The move exceeded the median forecast in a poll of economists, which had pointed to a more modest 25 basis point reduction. It marks the second consecutive rate cut by the Bank of Zambia as policymakers adjust to shifting inflation dynamics.
Annual inflation slowed to 9.4% in January from 11.2% the previous month. Although the figure remains above the central bank’s 6% to 8% target range, the sharper-than-expected deceleration has provided room for a more accommodative stance.
Authorities in the copper-dependent Southern African economy have been working to stabilise public finances amid ongoing debt restructuring efforts. However, progress on restructuring has been slower than initially planned, keeping fiscal risks in focus.
The latest rate decision signals policymakers’ intent to support economic activity while carefully navigating inflationary pressures and external vulnerabilities.
