BOZ adjusts policy rate

The Bank of Zambia (BoZ) has adjusted its policy rate upwards by 25 basis points to 9.5 % for June 2013 following a meeting held by the Monetary Policy Committee this year.

A monetary policy rate is a tool used for controlling inflation, determining day-to-day liquidity operations and other market rates.

BoZ has in the last two (2) months maintained the policy rate at 9.25 percent.

In a statement issued to ZANIS in Lusaka today, BoZ Head of Public Relations Kanguya Mayondi said the committee decided to increase the policy rate to 9.5 per cent for June as a response to inflation challenges.

Mr Mayondi disclosed that the Committee anticipates upward risks to inflation during the month of June 2013, mainly arising from recent increase in the pump price of fuel, coupled with the lagged effects of the recent exchange rate depreciation.

He said the committee, however, expects inflationary pressures to be moderated by the relative stable prices of food items.

Mr Mayondi said this resulted from a positive food balance as indicated in the recent crop forecast survey results.

He explained that the committee weighed the risks and was of the opinion that inflationary pressures during the policy-relevant period would be a threat to the achievement of end-year inflation target of 6.0%.

Mr Mayondi has since revealed that the next meeting of the Monetary Policy Committee to review the Bank of Zambia Policy Rate will be held at the end of June 2013.