Zambia’s central bank cuts key lending rate

Bank of Zambia
Bank of Zambia

Zambia’s central bank on Wednesday cut its benchmark lending rate by 125 basis points in order to safeguard the financial sector.

Bank of Zambia (BoZ) Governor Denny Kalyalya said the lending rate has been reduced to 8.0 percent in order to also safeguard people’s lives and livelihoods in the wake of the COVID-19 pandemic.

He told reporters during a press briefing that the Monetary Policy Committee during its sitting noted the significant worsening in economic conditions over the second quarter and the much weaker growth prospects in 2020 than earlier anticipated as the other basis to reduce the lending rate.

“Urgent macroeconomic adjustment measures, underpinned by the reorientation of expenditures to address the adverse impact of the pandemic to save people’s lives, fiscal consolidation and the restoration of debt sustainability over the medium term, remain imperative to promote sustainable development,” he said.

According to him, the COVID-19 pandemic has had a telling effect on domestic economic activity, which has worsened in the second quarter as reflected in company shutdowns, job and income losses, declining business output and a notable declining in consumer demand.

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