Zambian Inflation Slows in August Amid Record Interest Rates

The inflation rate in Zambia, Africa’s biggest copper producer, declined in August after the central bank held interest rates at a record high.

Consumer-price growth slowed to 7.1 percent on an annual basis from 7.3 percent in July, John Kalumbi, the director of the Central Statistical Office, told reporters today in Lusaka, the capital. Prices rose 0.7 percent in the month.

Food carries a 53 percent weighting in the consumer price basket and the reduction of corn-production subsidies in May has resulted in higher prices of the dietary staple. That same month, the government also lowered subsidies for fuel, leading to a more than 20 percent increase in petrol costs and adding to price pressures.

The country’s trade surplus shrank to 94 million kwacha ($17 million) in July from 150 million kwacha in June, the statistics office said today.

Zambia’s central bank in July left its benchmark interest rate unchanged at a record 9.75 percent after raising it twice this year to help ease concerns about rising inflation. The southern African nation is targeting 6 percent inflation by year-end. Policy makers at the Bank of Zambia next meet tomorrow.

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