LUSAKA, May 13 – Bank of Zambia lowered its benchmark interest rate by 25 basis points to 13.25% on Wednesday, citing easing inflation and relative currency stability despite risks linked to the Iran war.
The move marked the central bank’s third consecutive rate cut, though the latest reduction was smaller than the 75-basis-point cut delivered in February.
Zambia’s annual inflation rate slowed to 6.8% in April from 7.1% in March, marking the fourth consecutive month of easing price growth and keeping inflation within the bank’s 6% to 8% target range.
Governor Denny Kalyalya said policymakers considered expectations for a stronger maize harvest and stability in the kwacha when making the decision.
“In arriving at this decision, the bank took into account the expected favourable maize harvest during the current crop marketing season and the observed relative stability in the exchange rate of the kwacha,” Kalyalya told reporters.
Kalyalya said inflation is expected to remain within target levels, although policymakers remain cautious because of uncertainty linked to the conflict involving Iran and its impact on global energy markets.
The copper-producing Southern African nation temporarily suspended some fuel taxes in April for three months in an effort to cushion households and businesses from rising global fuel prices.
The central bank now expects inflation to average 6.8% in 2026 before easing further to 6.1% in 2027.
