Zambia Holds Rate at 2014 Low as Inflation Pressure Persists
Zambia’s central bank held its key interest rate for a third straight meeting as inflation pressures persist in Africa’s second-biggest copper producer.
The bank maintained the rate at 9.75 percent, Governor Denny Kalyalya told reporters Wednesday in Lusaka, the capital. That’s the lowest since 2014.
Inflation accelerated to an almost two-year-high of 8.3 percent in October. The central bank’s projections show that growth in consumer prices will remain outside the upper bound of the target range of 6 percent to 8 percent over the next year.
Foreign-exchange reserves declined to $1.63 billion at the end of September, enough to cover 1.9 months of imports, from $1.73 billion at end-August; the committee is concerned about the drop.
The southern African nation had its credit assessment cut deeper into junk last month by Fitch Ratings Ltd., citing a widening budget gap and a faster-than-expected increase in debt levels. The company lowered its long-term foreign currency assessment to B-, with a negative outlook.