BOZ increases MPR to control inflation
By Masauso Mkwayaya
The Bank of Zambia -BOZ- has raised the Monetary Policy Rate -MPR- by 50 basis points to 14 percent, to control inflation.
This is an increase from 13.5 percent as of the last Monetary Policy Committee meeting in August this year.
Bank of Zambia Governor DENNY KALYALYA says the adjustment is aimed at steering inflation towards the target band of 6 to 8 percent.
Speaking at the 4th quarter Monetary Policy Committee -MPC- announcement and press briefing in Lusaka today, Dr. KALYALYA said annual overall inflation continued to rise in the third quarter of 2024, averaging 15.5 percent, up from 14.6 percent in the second quarter.
He attributed the inflationary pressures to the low supply of maize grain, fish and vegetables; increased demand for solid fuels due to sustained electricity load management; and depreciation of the Kwacha against major currencies.
Dr. KALYALYA also said economic activities weakened further in the third quarter, as private sector conditions deteriorated.
He said the decline was largely due to the drought’s impact on electricity generation, which affected other sectors.
Additionally, Dr. KALYALYA said the Central Bank has acquired gold worth 7.3 million U.S. dollars, pushing the total value of gold held by the Central Bank to 217 million U.S. dollars since the programme began in 2020.
He said the Bank of Zambia is also engaging with other central banks in the region to explore the use of local currencies in cross-border transactions, reducing the reliance on the dollar to access foreign currencies in neighbouring countries.
And Bank of Zambia Deputy Governor, FRANCIS CHIPIMO said the Central Bank has discouraged the use of money in bouquets, as cash should not be used in ways that degrade its value.
