The Bank of Zambia has noted that weakening economic growth, load shedding and tightening liquidity in Zambia are threatening financial stability in the market.
And the Central Bank’s Monetary Policy Committee has maintained the policy rate, a key determinant in lending rates, at 10.25 percent.
BoZ Governor Denny Kalyalya says the committee took into account projected inflation remaining above the upper bound of the 6.8 percent target range, tightened liquidity and reduced production owing to electricity challenges.
Dr. Kalyalya noted that increased food prices owing to droughts in the last farming season have also had a negative toll on inflation.
He says the above factors required the upward adjustment for the policy rate but the Central Bank had to hold it pending some measures by the Ministry of Finance.
Speaking during the MPC quarterly briefing in Lusaka today Dr. Kalyalya noted that global growth has equally weakened with demand for copper by China having reduced owing to decline in investment in emerging markets and reduction in global trade due to ongoing trade tensions between the USA and China among others.
And Bank of Zambia Deputy Governor Operations Francis Chipimo said access to finance has remained a challenge for private sector growth and investment.
Dr. Chipimo however said there are a lot of developmental issues being undertaken aimed at enabling the financial sector mobilize savings and lend money to investors with ideas.