BOZ CUTS POLICY RATE TO 14.25% AMID INFLATION MODERATION

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Posted by admin on November 12, 2025 at 6:41 AM

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The Monetary Policy Committee (MPC) has reduced the Monetary Policy Rate by 25 basis points to 14.25 percent, following its meeting held on November 10–11, 2025, in a move aimed at supporting economic activity amid signs of easing inflation.

Announcing the decision, Bank of Zambia Governor Dr. Denny Kalyalya said inflation had declined further in the third quarter, with projections indicating a faster deceleration toward the lower bound of the 6–8 percent target band over the forecast horizon.

He said Inflation fell to 12.3 percent in September from 14.1 percent in June, and further to 11.9 percent in October, driven by the appreciation of the Kwacha and a bumper maize harvest that lowered food prices.

However, Dr. Kalyalya said the 2025 inflation outlook has been revised upward to 13.8 percent, due to slower-than-expected declines in food prices. From mid-2026 to Q3 2027, inflation is forecast to average 7.6 percent in 2026 and 6.6 percent in early 2027, supported by lower fuel prices, reduced electricity tariffs, and continued Kwacha strength.

The MPC noted that risks to inflation remain supportive of further easing, citing favourable weather forecasts, higher copper export earnings, subdued oil prices, and easing geopolitical tensions.

Despite the downward trend, the Committee adopted a cautious approach, acknowledging that inflation remains above target and market expectations are still elevated.

The next MPC meeting is scheduled for February 9–10, 2026, and the November 2025 Monetary Policy Report will be published on the Bank of Zambia website by the end of the month.