The Bank of Zambia (BoZ) reports that the Kwacha’s depreciation against the US Dollar slowed further in the 3rd quarter of 2024, easing to 1.7 percent from 3.8 percent in the 2nd quarter.
This decline was attributed to a reduction in demand backlog, driven by continued improvements in foreign exchange supply, as well as a weaker US dollar, which was influenced by expectations of an interest rate cut by the US Federal Reserve.
Speaking during the Monetary Policy Rate media briefing in Lusaka yesterday, BoZ Governor Denny Kalyalya noted that the reforms introduced in May and June 2024 to the foreign exchange market had helped stabilize the currency.
Dr. Kalyalya also mentioned that demand in the fourth quarter had risen, reaching 52.70 million US dollars as of November 4.
He has indicated that as of November 12, the Kwacha had depreciated by 3.1 percent against the US dollar, reaching a rate of K27.29.Bottom of Form
Meanwhile, Dr. Kalyalya said inflation is expected to decline to 9.0 percent in the first three quarters of 2026.
He said this will still be outside the 6.8 percent target band.
Dr. Kalyalya has highlighted that to contain inflationary pressures and anchor expectations, the Committee decided to raise the Policy rate by 50 basis points to 14.0 percent.
He further said the Monetary Policy will be complemented by liquidity management measures and ongoing reforms in the operations of the foreign exchange market.
By Margaret Mwanza
