Zambia makes huge rate cut, says inflation comfortably on target
TLT•Zambia’s central bank cut its policy rate by 250 basis points to 10.75%, citing inflation near the bottom of its 6%-8% target range. Economists had predicted a 25-basis-point cut.
1. Rate cut exceeds forecasts
The Bank of Zambia lowered its monetary policy rate to 10.75% from 13.25%, marking its fourth consecutive rate cut. Annual inflation eased to 6.1% in September from 6.2% the previous month, its lowest level since 2018.
2. Inflation and growth outlook
The bank now forecasts inflation of 6.7% in 2026 and 6.0% in 2027, slightly below its previous forecasts of 6.8% and 6.1%. Governor Denny Kalyalya said aligning monetary policy with the inflation outlook influenced the decision. The central bank expects growth of 5.3% in 2026 and 6.0% in 2027.
3. IMF talks underway
Zambia has begun talks with a visiting International Monetary Fund mission over a new support programme after its previous $1.7 billion arrangement ended in January.
