The Bank of Zambia has trimmed its benchmark policy rate by 25 basis points, reflecting growing confidence in the country’s disinflation trend and improved macroeconomic outlook. The decision lowers the rate to 9.75%, from 10.0%, marking the central bank’s first rate cut of 2025 and signaling a gradual shift from a tight to a more supportive monetary stance.
In its statement, the central bank said inflationary pressures have continued to ease, supported by improved food supply, currency stability, and tighter fiscal management. Headline inflation has remained within the medium-term target range of 6%–8%, offering policymakers room to stimulate borrowing and investment without undermining price stability.
Governor Denny Kalyalya noted that the rate reduction aims to balance growth and inflation objectives as Zambia’s economy stabilizes after completing its sovereign debt restructuring under the Common Framework earlier this year. The easing is expected to improve credit conditions for households and businesses, spur private-sector activity, and complement ongoing reforms to restore confidence in the banking and investment environment.
Analysts view the move as a signal that Zambia’s monetary authorities are prioritizing growth after several quarters of restrictive policy. With inflation trending downward and exchange rate volatility contained, the cut could support lending to small and medium enterprises while reducing financing costs across key sectors such as agriculture, construction, and manufacturing.
However, the central bank maintained that further adjustments would depend on sustained price stability and external developments, particularly movements in global food and fuel prices and shifts in U.S. monetary policy, which influence regional capital flows.
