By Moombe Hamoobola
Livingstone-based economist Amos Chibinda has urged commercial banks to immediately reduce lending rates following the Bank of Zambia’s decision to cut the Monetary Policy Rate.
The Central Bank reduced the policy rate by 75 basis points, from 14.5 percent to 13.5 percent.
Mr. Chibinda said the move is expected to lower the cost of borrowing and stimulate local investment. He explained that reduced lending rates will also boost consumption, as businesses and individuals will have more disposable income.
He emphasized that commercial banks must respond by lowering their lending rates accordingly to enable businesses and citizens to fully benefit from the policy adjustment.
Mr. Chibinda welcomed the Central Bank’s decision, noting that it comes at a time when inflation has eased to single digits and with the anticipation of a bumper harvest.
He added that with favorable conditions, inflation could decline further, potentially falling below the projected 6 to 8 percent range by the second quarter of the year.
