The Bank of Zambia has announced an increase in the Monetary Policy Rate from 10.25% percent to 11.50%.
Grappling with energy poverty and rising inflationary pressure, two day deliberations by the monetary policy committee commenced Monday 18th November into Tuesday with the announcement made by BOZ Governor Dr. Denny Kalyalya.
The Kwacha has been on a one way traffic losing streak with a year to date depreciation of 17% given rising dollar demand and asset sell off pressure as sentiment wanes.
Zambia’s reserves are at a decade low at just below one and half yards translating to import cover 1.6 months which has incapacitated the central bank from sterilizing the market through offloading dollars.
The adjustment comes barely a week after the Central Bank increased the commercial banks overnight lending rate and for the same reason: curb inflation.