• Bank of Zambia is going to keep the Monetary Policy Rate at 9 percent.
• Inflation forecasts are indicating that inflation is slowing down to single digit.
• The Kwacha is more stable than it was last year.
An Economist says financial market players expect the Bank of Zambia to maintain the Monetary Policy Rate for the second quarter of the year at 9 percent.
Dr. Patrick Chileshe told Money FM News in an interview that this is because the inflation forecasts are showing that inflation is slowing down to a single digit, coupled with stability in the foreign exchange market since the start of 2022.
Dr. Chileshe noted that the Kwacha is more stable than it was last year, therefore the key driver of inflation in the country does not suggest that inflation will increase going forward.
“We expect that the Bank of Zambia is going to keep the Monetary Policy Rate at 9 percent for two reasons, one that the inflation forecasts are indicating that inflation is slowing down to single digit. That means that there is no reason for the Central Bank to change the policy.”
“Secondly, we are also seeing that there is a lot of stability in the foreign exchange market since the start of the year. We are seeing the Kwacha is more stable than it was last year which means that the key driver of inflation in Zambia going forward does not suggest that inflation will be on the rise,” Dr. Chileshe noted.
He said based on these two factors, financial market players do not expect the Central bank to change the Monetary Policy.
Bank of Zambia is expected to announce the Monetary Policy Rate for the second quarter of the year on Wednesday next week.
In February 2022, the Central bank maintained its benchmark rate at 9 percent on expectations that inflation will continue slowing and to support a fragile economic recovery.
