Bank of Zambia Governor Denny Kalyalya displays a Kwacha note to Journalists during a news briefing
Bank of Zambia Governor Denny Kalyalya displays a Kwacha note to Journalists during a news briefing

The Bank of Zambia has raised its key interest rate for the first time since November 2015 in a bid to stabilize the deteriorating currency and support macroeconomic stability.

The Central Bank has raised the Monetary Policy Rate to 10.25 percentage from 9.75 percent, Governor Denny Kalyalya told Journalists at a media briefing in Lusaka today.

Although the country’s annual inflation rate for the month of April is at 7.7 percent, the Central Bank projects that over the next eight quarters, inflation is projected to rise above the 6 to 8 percent target range for this year as some of the risks to inflation outlined in the previous MPC have begun to materialise.

Lower maize output, continued elevated fiscal deficits, high debt service payments and the decline in gross international Reserves are among the key upside risks to inflation, Dr. Kalyalya said.

He said these risks have also contributed to heightened adverse market sentiments and are exerting pressure on the exchange rate.

And Dr. Kalyalya said the demand for government securities at auctions remained weak during the first quarter of 2019.

He said the subscription rate for government bonds fell 29 percent from 33 percent previously however the subscription rate for Treasury bills rose to 91 percent from 88 percent.

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39 COMMENTS

    • Dr.Kalyalya is in a bind.A lot of variables are outside his control.There so many moving parts gone awry in our economic engine and monetary interventions are just not enough am afraid.

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    • As long as Mr. Lungu and his crew are in charge, there is no hope for this country. I know there are some people on this blog trying to paint a positive image of Mr Lungu. But just look at the economy, the corruption, the bad decision making.
      Just look at the people in the so called “task force” or “working group” appointed to oversee KCM liquidation. Firstly the lawyer appointed has no prior experience and is linked to the president. But that’s just the surface. How about Kaiser, Amos etc? People with no competence whatsoever to deal with such matters. But someone stands to benefit greatly from all this, and it’s not the Zambian people.

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    • There is nothing anyone can do to influence the economy in Zambia.

      Not even the finance minister has influence. She is just an extra, just like you and I. Sad but true.

      Only Lungu, with advisors like Kaizer, make key decisions regards the economy.

      These decisions are made late at night while heavily intoxicated with their favourite beverage.

      Now you understand why the economy is in the state it is in.

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    • As long as bandit queen Margaret is heading ministry of finance and Lungu is the occupant of Plot 1 Zambia is doomed. HH is the only savior left for zambia.

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    • Like King so is the treasurer. Danny is a bookish economist as is Lungu a bookish Lwyer who chewed his widow client’s money. zambia is doomed under Lungu

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  1. This is the worst BOZ governor in decades. He doesn’t know wether he is coming or going. He is even encouraging Banks to renegotiate loans with customers for a longer payment period or extend the duration of payment? Is this what you call monetary policy evaluation or you simply pray that things will work out? Fire him forthwith we don’t need such zealots in this eoconomic quagmire, it’s sobatage at it worst.

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    • Spare a thought for him …he has to work with drunkards like Auntie Maggie and lazy foooooools from State House

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    • Bamwine,

      Do not shoot the messenger. This BOZ govenor has no influence on key decision making. Not even Maggie does.

      You have to look at the PF project post Sata to understand exactly who makes decisions. Most of the cabinet is just there for show.

      Only those closest to Lungu have a say. And they have all become very very rich while the economy has become very very poor.

      I am not making this up.

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    • Actually let this inept lot fire him,and am sure his now modest but factual revelations of the facts is gaining him enemies in PF who dont want the truth to be known…how i wish Sata could see the mess he left us with…they may soon start failing to pay themselves their salaries

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  2. Dr Kalyalya is the only credible voice among the guys running (down) this economy. An oasis in the severe desert. If he had to be removed, we would go into a tailspin for sure.

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    • Dont under estimate the PF incompetence, i wouldnt be suprised if they removed him and gave one of their minions

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  3. When we in upnd warned you and gave you cardinal advice on the economy we were labelled doomsayers. Can all those pf rifraffs please address the nation and tell us what is going on. This is untenable

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    • yes tongas and all other tribes which make up the UPND, including non partisan sensible people who dont need to be a member of any political party to know that pf is a doomed failed experiement

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  4. LOLO!!!
    Lolololo lo lo lo lo!! Bola naikosa!

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  5. Am sure HH the sadist and bad mouther to investors is extremely happy with whats currently obtaining in our economy but what he and his cronies dont realise is that we wont vote for him because he spend the 5 years in power blaming others for failure to correct his over promises.
    Remember that HH has promised to employ everyone as civil servants but is this attainable and where will he get the money when he says he will not tax employees.

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    • Try to stay within the topic and be relevant to the conversation.
      The “Interest are too High”, So what’s your comment on that?

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    • Malinso try to be serious naiwe things are bad and you keep on saying HH is bad and yes we all know that everyone on earth isn’t perfect but look at what this leader called Lungu is doing. For me personally i had very high hopes in Mr. Lungu and i thought that he will be the greatest leader of all but looking at his performance as president of Zambia even RB makes sense even though he was a thief as well.

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    • This one above @Malinso has no nzelu. How does HH come in and when was he in power for 5 years?

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  6. All this is like a bad dream .,..where is the $17 billion we are told we owe ???

    Though I support the idea of Zambians running our own mines , in fact all mines must be owned at least GRZ 50/50 , one can not help but think the takeover of KCM is being done in gansta style , Kaiser Zulu , through desperation. No money in GRZ.

    We only hope the law brains have done their homework and we don’t find ourselves in a situation where we can not export any copper because of international injunctions

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  7. There is little this change in mpr can do to keep the kwacha grounded and stable if the move is not accompanied by its sister fiscal policy…I really don’t get why The Governor is being thrown under the bus. In Zambia we are fond of running away from underlying issues, rather prefer treating symptomatic attributes. Please can the Government also hold their own presser and commit to upholding fiscal policy.

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  8. Fiscal policy under Maggie and Lung,, the two sots is untanable. No wonder she went to the NDF in a drunken stupor to drive a point that there is nothing more that anyone can do to change the status quo. After all, the only thing they discuss in cabinet is where the next drinks will come from and Kaizer shouts KCM, KCM.What do you expect?

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  9. Its strange the hatred directed at President Lungu. The greatest challenge we have as Zambians is that we look at the Zambian economy with political spectacles. Even HH or Kambwili became president today, they will just make arrests of the perceived thieves but the economy will still be struggling. Why? The people driving the western economies are individuals like Bill Gates, Jack Ma, Richard Branson, Dangote(Africa) etc who unlike us don’t have time to insult the president and opposition leaders day and night instead look for opportunities in the midst of difficult situations.

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  10. This means Zambia’s economy is in the intensive care unit . Its sad to see your loved one being under the watch of unqualified doctors Lungu and Kalyalya.

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  11. Raising interest rates is counterproductive for this economy because the problem is not excess money supply but cost push inflation resulting from unsustainable budget defects caused by reckless spending, dwindling foreign reserves due to lack of productivity, volatile kwacha depreciating almost daily, high taxes which has prevented investments, lack of accountability, corruption and general poor governance.

    In short the economy is experiencing what we call stagflation. Declining output accompanied by rising unemployment and rising prices.

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  12. Blah blah bah … as I said he ( the BOZ so called deputy governor) is a lame dozy gossiping cunt a total waste of space Doc hahaha you mean dot insignificant ***** this geezer has helped to piss the country into debt big time ( Euro bond )

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  13. Blah blah bah … as I said he ( the BOZ so called deputy governor) is a lame dozy gossiping cunt a total waste of space Doc hahaha you mean dot insignificant ***** this geezer has helped to piss the country into debt big time ( Euro bond )

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  14. Blah blah bah … as I said he ( the BOZ so called deputy governor) is a lame dozy gossiping cunt a total waste of space Doc hahaha you mean dot insignificant ***** this geezer has helped to piss the country into debt big time ( Euro bond )

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  15. Those criticizing ECL don’t hate ECL but are trying to help him to open his eyes that he is going to be held responsible ultimately! As the Bible says: Open rebuke is better than love secretly hidden (Proverbs 27:5-6). As they say, the freshness of fish is determined by examining the head! Sadly, when technocrats have said control GRZ borrowing, ECL has arrogantly insisted he will continue borrowing! Careless and clueless presidential pronouncements create confusion and uncertainty in the economy! ECL is lost at sea and no amount of advice will do! As Albert Einstein put it, it is futile expecting the minds that created the problem to come up with meaningful solutions! We need to replace ECL and his gang to solve this problem!

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    • I personally can’t stand the man. Used to like him at the very beginning especially when he was not president but then his arrogance, incompetence and love for corruption have made me hate him. Can’t pretend.

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  16. This is bad ladies and gentlemen; whether neutral or partisan the situation facing us is blind to religious and political affiliations. We have in State House the man who said He would borrow without shame, he has gone after publishers of the Financial Intelligence report Jogs with Kampyongo and Bowman Lusambo and feels very comfortable having Maggie as his Finance Minister!!
    Is it possible he doesn’t know what is going ?

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