Friday, May 31, 2013

Zambia raises rate 25 bps on risks to 2013 inflation target

    Zambia's central bank raised its policy rate by 25 basis points to 9.5 percent, saying inflationary pressures "would be threat to the achievement of end-year inflation target of 6.0%."
    The Bank of Zambia, which raised rates by 25 basis points in 2012, said in April that it expected inflationary pressures to continue to moderate in the month of April.
    Inflation rose to 7.0 percent in April from 6.5 percent in March and the central bank said it was anticipating upward risks to inflation in June due to recent increases in the pump price of fuel coupled with the lagged effects of the recent exchange rate depreciation.
    These pressures will be moderated by the relative stable prices of food due to a positive food balance as indicated in recent crop forecast surveys, the bank said.
    Zambia's average inflation rate in 2012 was 6.6 percent, according to the International Monetary Fund, which forecasts a decline to 6.5 percent this year.


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