• Inflation is projected to remain above the upper bound of the 6-8 percent target range.
• The decision also recognizes existing vulnerabilities in the financial sector and fragile growth.
• The Bank remains committed to adjusting the policy rate upwards.

Bank of Zambia says the Monetary Policy Committee (MPC), at its May 17 – 18, 2021 Meeting, decided to maintain the Monetary Policy Rate at 8.50 percent.

Addressing the Media in Lusaka, BOZ Governor Christopher Mvunga further reveals that inflation is projected to remain above the upper bound of the 6-8 percent target range over the forecast horizon.

Mr. Mvunga said inflationary pressures are expected to ease in view of the improved supply of food, particularly maize and wheat following a good crop harvest.

He added that the significant improvement in copper prices and renewed interest in domestic Government securities by non-resident investors are supportive of the foreign exchange market and in turn lower inflation going forward.

“The decision also recognizes existing vulnerabilities in the financial sector and fragile growth,” he said.

The Bank of Zambia governor stated that, “to restore and anchor macroeconomic stability, the implementation of fiscal adjustment measures in line with the Economic Recovery Programme and understandings reached in discussions with the IMF remain critical.”

He stated that the Bank remains committed to adjusting the policy rate upwards should the expected drop in inflation not materialize sooner than anticipated.