The Bank of Zambia (BOZ)’s Monetary Policy Committee (MPC), has reduced the monetary policy rate by 25 basis points, from 13.5 percent to 13.25 percent following a meeting held from 11 to 12 May 2026.
Bank of Zambia Governor Denny Kalyalya explained that the committee considered several factors in making this decision, including the stability of the kwacha against the U.S. dollar, the expected maize harvest for the current crop marketing season, and the uncertainties stemming from the ongoing Middle East conflict.
Dr Kalyalya made these remarks today during a press briefing, citing that these considerations led to a careful approach in adjusting the policy rate.
He highlighted the favourable prospects for the current crop season, citing expectations of a bumper maize harvest that is likely to foster food security and curb inflation pressures in the country.
Dr Kalyalya also expressed that the committee also noted the relative stability of the Kwacha against the US dollar, which he said had contributed to a more predictable inflation outlook.
He highlighted that the country’s Inflation has shown remarkable improvement, from 11.2 percent in December 2025 to 7.1 percent by March 2026, which reduced furthermore to 6.8 percent in April within the central bank’s targeted range of 6-8 percent.
ZANIS reports that the MPC projects inflation to remain within the target band, with an average of 6.8 percent for 2026 slightly below the previous forecast of 6.9 percent.
“For 2027, inflation is expected to further decline to around 6.1 percent before edging up to approximately 6.6 percent in early 2028. These projections are supported by anticipated continued exchange rate stability and lower maize prices due to the favourable harvest,”
“While the positive outlook for maize and exchange rates supports a lower inflation trajectory, the geopolitical uncertainties and climate risks necessitate a cautious approach,” he emphasised.
The Committee further reaffirmed that future monetary policy decisions will continue to be data-driven, closely monitored against inflation outcomes, forecasts, and risks.
The next MPC meeting is scheduled to take place on September 28 and 29, 2026.

