By Chris Mfula
LUSAKA (Reuters) -Zambia’s central bank kept its main interest rate unchanged on Friday after two raise decisions, citing an expected slowdown in inflation.
The Bank of Zambia maintained its Monetary Policy Rate at 14.50% after hiking it by 50 basis points each at its last meetings in February and November, to tame consumer inflation, which sits well above the bank’s 6%-8% target range.
The country’s annual inflation rate was at 16.5% in April, unchanged from the previous month.
“The forecast over the next eight quarters shows that inflation will decline faster towards the 6-8% target band than projected in February,” central bank Governor Denny Kalyalya told a press conference.
Inflation is projected to average 13.5% this year, whereas at the central bank’s last monetary policy meeting in February the forecast was for average inflation of 14.6%.
Zambia revised its 2024 economic growth to 4%, up from the previous forecast of 1.2% given in February, after a higher than expected economic performance following a severe drought.
(Reporting by Chris Mfula; additional reporting by Sfundo Parakozov,Writing by Bhargav AcharyaEditing by Bate Felix)
