Policy Rate expected to remain at 8.50%

The Centre for Trade Policy and Development (CTPD) said it was expecting the Monetary Policy rate to be maintained at 8.50% for the second quarter of the year.

Researcher for Public Finance Management Wakumelo Mataa said in a statement that this would create room for the upward adjustment made in the first quarter to take full effect.

He said: “Although there has been a slowdown in inflation since the last upwards adjustment, the prevailing rate of inflation at over 22 percent remains well above the 6 – 8 percent target range”, and therefore did not expect a downward adjustment to the Monetary Policy rate.

Mr. Mataa said the Monetary Policy alone is not enough to address Zambia’s Inflation in the long-term explaining that “in addition to robust monetary policy interventions, correcting the fiscal situation is of prime importance”.

The Bank of Zambia Monetary Policy Committee announced a 0.5% upward adjustment to the Monetary Policy rate in the first quarter of 2021 from 8% to 8.50%.

Central bank Governor Christopher Mvunga is expected to announce the policy Rate of the second quarter at a media briefing on Wednesday 19th May 2021.

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