The Bank of Zambia (BoZ) has maintained the Monetary Policy Rate at 14.5%, citing the continued downward trend in inflation, which has fallen from 14% in June to 13% in July.
BoZ Governor, Denny Kalyalya, said the decision will help consolidate the progress made in curbing inflation.
Speaking during the Monetary Police rate update in Lusaka today, Dr. Kalyalya said that inflation is projected to fall within the target range of 6–8% by 2026, although market expectations remain elevated relative to the target band.
“The key drivers of the recent inflation slowdown include improved maize supply, lower fuel prices, and the appreciation of the Kwacha against major convertible currencies,” said Dr. Kalyalya.
He also cited a reduction in prices for both food and non-food items as key driver to the reduced inflation.
Meanwhile, Dr. Kalyalya disclosed that the Kwacha appreciated by 14.4% against the US dollar in the second quarter of 2025, reversing a 4.0% depreciation recorded in the first quarter.
He attributed the appreciation to increased foreign exchange supply, particularly from the mining sector, alongside improved investor sentiment and a weaker US dollar.
Dr. Kalyalya noted that the mining sector remains the dominant source of foreign exchange on the market, with inflows rising by 22.1% to $680.1 million adding that of this amount, $262.1 million was remitted directly to the Bank of Zambia in tax payments.
Angel Kasabo
