The Bank of Zambia has maintained the Monetary Policy Rate at 11.5 percent.

Speaking at a media briefing in Lusaka, Bank of Zambia Governor Dr Danny Kalyalya said continued rise in inflation rate is one of the factors that earlier part of forecast period and thereafter decline towards the upper bound of the target range of 6 to 8 percent.
“Underlining this projection the effects of ongoing electricity supply challenges n and increased external debt service payments on inflation through the expectations and exchange rate channels.” the Governor said.

He noted that the upside  risks to the  inflation outlook included  further increase  in prices of  maize grain and related products, the second round  effects  of the increase fuel and  electricity prices  and slower  progress  on fiscal consolidation.
“However it is envisaged that inflation could decline faster than currently  projected  on account of the anticipated improvement in agriculture  output  due to favorable  rainfall observed so far during the  2019-2020 crop season” He explained.
Dr Kalyalaya further says Kwacha depreciated by 6.8 percent to a quarterly average of K13.86. 

“The Kwacha  depreciated against all the major  trading  partner curries  on account of  subdued supply  of  foreign exchange amidst  escalating  demand for the  importation  of petroleum products , electricity and agricultural inputs” He explained.
Dr Kalyalya said the pressure on the Kwacha mounted towards the end of November into December resulting in the Kwacha reaching K14 and K15 levels respectively.

Dr Kalyalya added that to moderate exchange rate pressure the bank had to increase the statutory reserve ratio and shifted compliance of the statutory reserve requirement from weekly to daily.
And Dr Kalylaya further said that indicators of economic activity suggest a further slowdown in growth in fourth quarter owing to the contraction in the mining output, electricity generation, and cement production consumer spending and manufacturing of selected products.