Zambia Interest Rate

The Central Bank of Zambia raised its benchmark interest rate by 50 basis points to 14% during its regular meeting on November 13, 2024, after holding it steady at 13.5% in August. This decision pushes borrowing costs to their highest level since April 2017, aiming to counter persistent inflationary pressures and anchor expectations. Zambia’s inflation has consistently risen since July 2023, reaching 15.7% in October 2024, the highest level since December 2021. Policymakers stated that inflation is projected to remain above the 6.8% target range this year, at around 15%, and the 2025 forecast has been revised upward to 13.9%, up from August's estimate of 12.7%, largely due to the depreciation of the kwacha amid the impact of prolonged drought. This has also led to a significant downward revision of the 2024 real GDP growth projection, now expected to be 1.2%, compared to the prior estimate of 2.3%.