BOZ CUTS INTEREST RATE, REPRICING CYCLE BEGINS

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Posted by admin on February 12, 2026 at 2:19 AM

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The Bank of Zambia (BOZ) has reduced the Monetary Policy Rate (MPR) by 75 basis points, lowering it from 14.25 percent to 13.5 percent.

Expert Economist Kelvin Chisanga highlighted that Borrowers with loans linked to the MPR or interbank rates may see lower repayments over time, easing pressure on businesses and households.

Savings accounts and fixed deposits may earn slightly less interest as banks adjust to the new rate.

He said the rate cut aims to Support economic growth aspirations Stimulate private sector-led investments Encourage borrowing appetite in productive sectors such as agriculture, manufacturing, and SMEs.

“Short-term Treasury yields are expected to respond first, with longer-term bonds adjusting depending on inflation trends and future policy guidance.” He said.

The repricing cycle will gradually transmit through the credit basket, especially where capital formation remains weak.

Analysts warn that expansionary policy in an election year must be carefully managed to avoid risks of non-performing loans and inflationary pressures.

BOZ’s decision is designed to balance growth, price stability, and currency resilience, while promoting a data-driven repricing cycle across the financial system.