Bank of Zambia has reduced the Monetary Policy Rate by 0.25 percentage points, bringing it down to 13.25 percent for the second quarter of 2026 from 13.5 percent in the first quarter.
Speaking during the Monetary Policy Committee announcement in Lusaka, BOZ governor Dr. Denny Kalyalya says the decision was influenced by expectations of a favourable maize harvest during the current crop marketing season, the relative stability of the Kwacha against the United States Dollar, and continued uncertainty arising from the conflict in the Middle East.
Dr. Kalyalya explains that while inflation risks remain, the situation in the Middle East required a cautious adjustment that still maintains an appropriate monetary policy stance.
The reduction in the Monetary Policy Rate is expected to have several effects on businesses and households such as Commercial banks may gradually reduce interest rates on loans, making borrowing slightly cheaper for individuals and businesses.
In addition, consumers with loans may experience lower repayment costs over time, enabling them have a little more money to spend.
By Prudence Chota
