• The BoZ is likely to pursue a growth objective through the yet to be announced Monetary Policy Rate at its next briefing.
• This is due to the positive performance of the Kwacha in the previous months.
• High Monetary Policy Rate forms the basis for lending rates by financial institutions

An Economist says Bank of Zambia (BoZ) is not likely to increase the Monetary Policy Rate (MPR) from the current 9 percent.
Emmanuel Zulu told Money FM News in an interview that it is likely that Government will pursue a growth objective with regards to the yet to be announced Monetary Policy Rate.
Mr. Zulu stated this is due to the positive performance of the Kwacha in the previous months where it is trading at an average of K16.02 ngwee and anticipated global economic recession.
He explained that the Central Bank has previously been employing contractionary interest rates to reduce annual inflation which was above 20% before the August 2021 elections.
“The BoZ is likely to pursue a growth objective through the yet to be announced Monetary Policy Rate at its next briefing. The overall objective of the Government has been to achieve a single digit inflation rate which it managed in June at 9.7% and sustained at 9.9% in July 2022. However, continued application of contractionary Monetary Policy may have dare consequences if not well balanced with economic growth objectives.”
“This is because the reduction of liquidity levels through high base rates as has been the case where the MPR was maintained at 9.0 stifles economic activities since accessing capital for most enterprises remains expensive,” Mr. Zulu stated.
He noted that high Monetary Policy Rate forms the basis for lending rates by financial institutions which have seen interest rates by banks and financial institutions as high as 30% in some instances.
Bank of Zambia left its key interest rate at 9% at its May 2022 meeting, citing the continued deceleration in inflation and its projected further decline towards the target range of 6-8% by the end of 2023.
The Monetary Policy is a Government tool to control liquidity levels and ensure price stability through Monetary Policy Rate (MPR) which is the base rate for interest rates. The Bank of Zambia is today scheduled to announce the Monetary Policy Rate.