Zambian Central Bank Holds Interest Rate as Inflation Risks Ease

Zambia’s central bank held the benchmark interest rate at 9.25 percent for the fourth straight month, saying inflation risks had moderated.

Higher supplies of corn, the staple food, and a ban on fishing in the country’s rivers and lakes from November to the end of February will probably lead to slower consumer-price acceleration, the Lusaka-based Bank of Zambia said in a statement on its website. Inflation eased to 7 percent in January from 7.3 percent a month earlier, and could slow to 6.4 percent by June, Governor Michael Gondwe said Feb. 21.

Still, “cost pressures arising from lagged pass-through effects” of the weaker currency of Africa’s biggest copper producer could push prices higher, the bank said.

Zambia’s Central Statistics Office is scheduled to announce February’s inflation figure tomorrow.

The country’s currency, the kwacha, has weakened 3.2 percent this year against the dollar and traded 0.7 percent lower at 5.37 versus the U.S. currency at 2:45 p.m. in Lusaka, the capital.

To contact the reporter on this story: Matthew Hill in Lusaka at mhill58@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.