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Bloomberg
Zambia’s central bank in a surprise move raised its benchmark interest rate for the second time this year to try contain inflation that’s still nearly triple the targeted rate.
The monetary policy committee lifted the gauge to 9% from 8.5%, Governor Denny Kalyalya told reporters. It was Kalyalya’s first rate decision since being reappointed to the post in September.
The increase by “that magnitude, which we consider moderate, was really to begin to steer inflation†toward the target range, said Kalyalya, who acknowledged the increase may have come as a surprise. The central bank expects inflation to ease to below 10% next year and to within its 6%-8% target range by 2023, he said.
The inflation rate surged to a near two-decade high of 24.6% earlier this year on higher food prices, before easing to 21.1% last month.
The increase adds to a half-a-percentage point hike in February and further reverses some of the 350 basis points of cuts announced last year to shore up the economy of Africa’s second-largest copper producer from a
coronavirus-induced slump.