Zambia’s central bank on Wednesday raised the policy rate by 125 basis points to 11.50 percent.
The decision was made by the Bank of Zambia (BoZ) Monetary Policy Committee at its meeting.
Denny Kalyalya, governor of the BoZ, told reporters at a press briefing that the decision was intended to counter inflationary pressures, including exchange rate pass-through effects, and try to bring inflation back to the target range in the medium-term to support macroeconomic stability.
The central bank chief said inflation was now projected to remain above the upper bound of the 6-8 percent target range over the entire forecast horizon.
He, however, said that to address the current economic challenges, monetary policy actions alone were not sufficient.
“They need to be complemented by the implementation of corrective measures by fiscal authorities and other key public policy makers,” he said.
Moreover, implementation of measures that address high fiscal deficits, debt levels, and liquidity constraints as well as dismantle domestic arrears remains critical to maintaining overall macroeconomic stability and attaining sustained economic growth, he added. Enditem