BoZ maintains monetary policy rate at 9.75 %

The Bank of Zambia has maintained the monetary policy rate at 9.75 percent.

Briefing the press in Lusaka, Central bank Governor Dr. Denny Kalyalaya has attributed the decision to maintain monetary policy to the inflation rate projection of between 6 to 8 percent target range and the low private sector credit growth among other reasons.

Dr. Kalyalaya says the Monetary policy rate committee has noted that containing the fiscal deficits within programmed levels remains a challenge as a result of rising external debt and associated debt servicing costs.

He says the in the second quarter of 2018, preliminary data indicates that the current account deficit widened to US$453.8 million from US$302. 7 million in the previous quarter,owing to unfavourable performance of the balance on goods.

Dr. Kalayalya adds that the fragility was also noted as an ongoing concern as non performing loans remain high.

The BoZ governor has further disclosed that the committee also judged risks to the inflation rate outlook to be on the upside, but that the committee is ready to make changes to the policy stance should inflation rise above 6.8 percent.

Meanwhile Dr. Kalyalya is optimistic that the refinancing of Zambia’s Euro bond by an unnamed Turkeyish company will be successful.

He says the current economic challenges Turkey is experiencing cannot be the reason for the failure to refinance the Euro bond as it is being done by a company and not the Turkish government.

Dr. Kalyalaya says the concern should be sourcing a financier who offers a cheaper price from the one that was obtained earlier.