The Bank of Zambia (BOZ) has reduced the Monetary Policy Rate by 75 basis points to 13.5 percent, citing a faster-than-anticipated decline in inflation and improved macroeconomic conditions.
BOZ Governor Denny Kalyalya said the Monetary Policy Committee (MPC) reached the decision after observing a sustained slowdown in inflation during the fourth quarter of 2025. He added that projections indicate inflation is likely to return to the 6–8 percent target band sooner than previously forecast.
Reacting to the development, Economist and Policy Analyst John Ng’andu told Flava News that the rate cut will lower the cost at which the central bank lends to commercial banks.
Mr. Ng’andu explained that this is expected to translate into reduced lending rates for businesses and individuals, making credit more affordable. He added that lower borrowing costs could allow individuals and firms to service loans at fairer interest rates and potentially benefit from extended repayment periods.
He said the move is likely to stimulate economic activity by encouraging borrowing, investment, and expansion across key sectors of the economy.
