Zambia holds rate steady, says policy to remain tight

    Zambia's central bank held its policy rate steady at 9.75 percent, saying the "monetary policy environment should remain tight during the policy-relevant period in order to be consistent with the end-year inflation objective."
    The Bank of Zambia, which raised its rate by 25 basis points last month, said there were still upside risks to its inflation objective from cost push pressures, largely from the pass-through effects of the depreciation of the kwacha currency, and it anticipates that further inflationary pressures may arise from demand pull factors in coming months.
    "Notwithstanding the above, the Committee observed that inflationary pressures may moderate on account of lower food prices due to seasonal improvement in supply and the waning effects of the recent upward adjustment in fuel prices following the removal of subsidies," it added in a statement from July 31.
    Zambia's inflation rate was steady at 7.3 percent in July and June and from late May to today the kwacha depreciated 4.4 percent against the U.S. dollar, quoted at 5.48 to the dollar today.

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