Bank of Zambia (BoZ) has increased the Monetary Policy Rate (MPR) from 13.5% in the third quarter to 14.0% in the fourth quarter of 2024.
BoZ Governor, Denny Kalyalya, has attributed the move to increase the MPR to continued increase in the actual and projected inflation, away from the targeted 6 to 8% band.
Speaking during the fourth quarter Monetary Policy Committee (MPC) media briefing in Lusaka today, Dr. Kalyalya said the increase in MPR is aimed at steering inflation back towards the target band of 6 to 8%.
He said the continued rise in the Inflation rate is not desirable for the economy.
Dr. Kalyalya said the MPC took into account complementary liquidity management measures , foreign exchange market and fragility of economy due to severe impact of drought, when increasing MPR.
He said low Maize supply, fish and vegetables, increased demand for solid fuels due to sustained electricity load management and depreciation of the Kwacha are key measures pushing the inflation upwards.
Dr. Kalyalya said the increased MPR is targeted at managing demand pressures.
He further said the drought has resulted in real GDP growth projection for 2024 being significantly revised downwards to 1.2 percent from the 2.3 percent in July.
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