The Bank of Zambia for the fifth time in a row kept its benchmark rate unchanged at 9.75%. This was established in a press briefing at the BOZ offices by Governor Dr. Denny Kalylya on 20 February.
This outcome was in line with analysts’ forecasts given the global growth slowdown from US-China trade impasse and Brexit uncertainty. The monetary policy committee resolved to keep the interest rate unchanged factoring inflation within the targeted band, currency stability and the need to stimulate economic growth.
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However the central bank has warned of risks to growth reflecting in weak factory activity for 6 months straight evidenced by Stanbic/Markit PMI which has been in red territory as a consequence of rising input costs and higher wage bill effects. This re-enforces the need for credit stimulus to boost economic growth.
However the central bank will continue to monitor global trends and will keep a close eye on the macroeconomic fundamentals.