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Alba Iulia
Thursday, October 22, 2020

Rate of inflation is projected to remain above the target range over the first half of 2020-BOZ

Headlines Rate of inflation is projected to remain above the target range over...

The Bank of Zambia (BoZ) has revealed that the rate of inflation is projected to remain above the target range over the first half of 2020.

BOZ says this is on account of the effects of on-going electricity supply challenges and increased external debt service, which affects inflation through the expectations and exchange rate channels.

Speaking in a BOZ January to June monetary policy statement issued to ZANIS today, BOZ predicts that inflation will decline thereafter on account of anticipated improvements in the agricultural output due to the favourable rainfall pattern observed so far during the 2019/2020 crop season, taking into account weak domestic growth, and liquidity challenges

BOZ states that the monetary policy will continue to focus on bringing inflation back to the target range of 6-8 percent in the medium-term.

The Bank of Zambia will continue to rely on the forward- looking monetary policy framework anchored on the policy rate as the key signal for the monetary policy stance, taking into account inflation forecasts and outcomes, identified risks, as well as progress in the execution of fiscal consolidation.

The institution states that in the second half of 2019, the policy rate and the statutory reserve ratio were adjusted upwards to counter inflationary pressures and exchange rate volatility.

BOZ adds that the overall annual rate of inflation, however, remained high, largely due to the sharp increase in prices of maize grain and related products, as well as the significant depreciation of the Kwacha against the US dollar.

It further notes that the annual rate of inflation averaged 10.3 percent from 7.9 percent in the first half of 2019.

The Bank of Zambia has since called for effective and sustained implementation of fiscal adjustment and structural measures to address elevated debt levels and debt services, and the accumulation of domestic arrears, and liquidity constraints.

And The Bank of Zambia (BoZ) has put in measures to mitigate the spread of COVID-19.

BoZ says the measures taken will minimise the movement of people into its premises to mitigate transmission of the coronavirus.

Members of the public have been advised to visit the Bank only when it is absolutely necessary and after securing an appointment.

The Bank of Zambia has announced that it has put in place various contact numbers, only to be used during working hours, from 08:00 hours to 16:30 hours.

The institution however says the restriction will not apply to government departments that collect revenue, as well as entities that transact with the banking division.

This is according to a press statement made available to ZANIS by the BoZ Communications Division in Lusaka today.


  1. These are real leaders unfortunately the man in State House is not one…PF are already using COVID-19 as an excuse without even giving figures of this invincible contingency fund.

  2. In times like these let’s work hard and pray earnestly too. Nothing seems to be going right in Zambia right now. We the people brought ourselves to where we are today and it is we the people that can do something to take ourselves out of this mess. Let’s collectively focus our efforts and ideas in redeeming ourselves. Waiting for someone else to do it for us will be waiting far too long and lagging far behind on the development ladder.

  3. Woe to the nation when slave is made king. We need to focus on containing covid 19 failure to which the second half of 2020 figures will remain the same if not waste.

  4. We’re facing a crisis now. Let’s live our lives the way people facing a crisis should. It’s not the time for petty fights. Apart from coronavirus we hv floods in some parts of the country. It’s really a difficult period made even more so by bad governance.

  5. How confident can such projections be made with the economic repercussions of Covid-19 still unfolding? No one can tell yet, how hard this crisis will hit African economies. I would wait 2 – 3 months (until around June) before making an inflation projection.

    BOZ should rather focus on what can be done urgently to keep the inflation rate as low as possible because everything higher than 2% is generally unacceptable for the longer run. The good thing for us is that China, the giant is slowly getting back on it’s feet and will soon be needing our copper again for it’s insatiable appetite.

  6. It’s gratifying that BOZ is puting in place measures for Zambia to mitigate the potential impact of the the over 1 Trillion USD proposed stimulus package in the US considering that this will definitely affect Statutory Liquidity Ratios of Banks(SLR). The ratio of liquid assets to net demand and time liabilities (NDTL) is big issue for banks allover the world. Apart from Cash Reserve Ratio (CRR), banks have to maintain a stipulated proportion of their net demand and time liabilities in the form of liquid assets like cash, gold and unencumbered securities. It’s also a great development that Zambia has recently formed a company dedicated to sale gold to Bank of Zambia. This will be key in the future in stabilizing the strength of the Zambian currency against the USD. The Treasury bills,…

  7. Last Dec 25th 2019 one U$1 to ZMW rate was $1 for 13 kwacha and now its 17.5 Kwacha and inflation is above target. Lungu’s term has been one slow endless down slide economically.

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