Zambia Leaves Rates on Hold With Inflation Seen Slowing Further

Zambia’s central bank left its benchmark rate unchanged on expectations that inflation will continue slowing and to support a fragile economic recovery, Bloomberg News reported. The monetary policy committee held the rate at 9%, Governor Denny Kalyalya told reporters Wednesday in Lusaka, the capital. It was Kalyalya’s second rate decision since being reappointed to the post in September. The decision to hold was supported by a “sharp decline in inflation since December” and due to “some fragility” in economic growth, Kalyalya said. Zambia’s Purchasing Managers’ Index declined to 49.9 in January, compared with 51.5 in December, with a level below 50 signaling a contraction. The MPC forecasts the economy will grow 3.5% in 2022 and 3.6% the following year. The southern African nation’s inflation rate dropped to 15.1% in January, the lowest in almost two years, compared with 19.3% in November. The central bank projects price growth will continue to trend toward its 6% to 8% target range over the next eight quarters, Kalyalya said. Read more.