Zambia holds policy rate steady, inflation on target

    The Bank of Zambia held its policy rate steady at 9.00 percent as inflation remains in line with the central bank's target of 7 percent.
    The central bank of Zambia said in a statement from Aug. 31 that its Monetary Policy Committee had taken note of upside price pressures from a proposed change in electricity tariffs and higher mealie meal and meat prices. However, these inflationary pressures are likely to be moderated by the stable exchange rate and stable prices for fuel, fish and vegetables.
    "The Committee has weighed the inflation risks going forward and it has noted that during the policy relevant period, inflation will be broadly in line with the end-year target of 7.0%. Therefore, the Committee decided to maintain the policy rate at 9%," the bank said.
    Zambia's inflation rate rose to 6.4 percent in August from 6.2 percent in July due to higher food prices. The International Monetary Fund expects the country's economy to expand by 7.7 percent this year, up from an estimated 6.5 percent in 2011 due to high copper production.
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