Zambia's central bank maintained its policy rate at 9.75 percent, saying upward pressures on inflation is expected to come from a seasonal rise in food prices along with the lagged pass-through effects of the recent deprecation of the kwacha currency.
"The current relatively tight monetary policy stance being pursued remains appropriate to mitigate the sustenance of these risks," said the the Bank of Zambia in a statement from Dec. 27.
Zambia's inflation rate rose slightly to 7.1 percent in December from 7.0 percent. above the central bank's 6.0 percent target.
The central bank raised rates in June and July by a total of 50 basis points.
Like many other currencies, the kwacha fell in late May through early July but then rebounded and rose until mid-October when it again fell. Since the start of the year, the kwacha is down just over 6 percent against the U.S. dollar, trading at 5.56 today.