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.