The Monetary Policy Committee (MPC) of the Bank of Zambia has maintained the policy rate at 15.5%. the committee further eased commercial bank’s access to the central bank liquidity by removing some quantitative restrictions. This move has been supported by the downward trend in the annual rate of inflation and is forecast to decelerate further and end the year on a single-digit note. Meanwhile expectations are for a stable kwacha in the last quarter of 2016 with support from the recent significant increase in the international copper prices which would hopefully be sustained.
According to the Bank of Zambia, economic activity has remained subdued since the last review in May 2016 arising from continued electricity shortages, cost and availability of credit as well as increased labour costs. Growth in 2016 has therefore been projected at 3 percent, a slight increase from the 2.9% recorded in 2015.