Monetary rate increased
The Bank of Zambia (BOZ) has increased the Monetary Policy Rate from 9-percent to 9.25 percent.
BOZ Governor Dennh Kalyalya said the decision was underpinned by projections that inflation is moving away from 6-8 percent target range which had been projected in November last year.
Dr Kalyalya said inflation is now projected to average 11.1 percent this year from November projections of 8.5 percent.
Mr Kalyalya also said inflation has been moving away from the target range because of factors such as the depreciation of the Kwacha, increase in electricity tariffs and projected drop in crop production owing to floods and army worms.
He said that the measures are not expected to affect the financial sector.
Dr Kalyalya also said that the Kwacha has continued to depreciate owing to low supply of forex due to reduced inflow from the mines in terms of mineral royalty and other taxes.
The governor added that BOZ has over time offloaded receipts from the mines to support the market of upto 443.5-million dollars in addition to the 333.5-million dollars provided in the third quarter of last year.