By BUUMBA CHIMBULU in Kabwe
THE benchmark of lending money for the first half of this year is focussing on containing escalating inflationary pressures and anchoring its expectations, the Bank of Zambia (BoZ) has said.
In February 2021, BoZ signalled its intentions to progressively tighten the monetary policy stance to bring inflation back to its six to eight percent target range over the medium-term.
Zambia’s annual inflation currently stands at 23.2 percent while the monetary policy rate is at 8.5 percent.
Over the first half of this year, monetary policy was focusing on containing escalating inflationary pressures and anchoring inflation expectations, says BoZ Deputy Governor-Operations, Francis Chipimo.
Dr Chipimo stressed that ensuring that inflation remained well anchored in the medium-term was essential to moderate fragilities in the financial sector and support economic recovery.
He indicated that the shift in the monetary policy stance followed almost a one-year period of monetary easing to support financial system stability and economic growth in the wake of the Covid–19 pandemic.
“This stance balances the need to rein in inflation against the efforts made to support financial system stability and economic growth,” Dr Chipimo said yesterday in Kabwe at the 16th media seminar under the theme Understanding the Monetary Policy Statement.
The BoZ, he said, expected that going forward inflationary pressures would begin to subside on account of excess supply of maize in view of a good crop harvest.
On the National Financial Switch, Dr Chipimo also said a total of 15 participants were live on the Mobile Payments module as at end of first quarter of 2021.
The Switch, which went live on the 23rd September 2018 on a trial basis, is the first ever local nationwide shared platform, which will facilitate exchange of information on digital payments throughout the Country.
“This module provides great opportunities for everyone as it provides diverse use cases and enables customers to conduct instant payments across networks and service providers without handling cash.
“This is particularly important, given that the pandemic period has continued to ravage economies across the globe,” he said.
Meanwhile, Dr Chipimo said discussions for the two-day media seminar would mainly cover monetary policy.
He however said it would also involve discussions on the Targeted Medium-Term Refinancing Facility and developments in the payment systems.
The Bank, he said, had taken a deliberate decision to focus its media training initiatives on specific topics to allow for a more detailed discussion and deeper understanding of the topics covered.
“The Bank recognises the importance of effective communication in carrying out its mandate of achieving and maintaining price and financial system stability in order to foster sustainable economic development.
“This seminar is, therefore, being held within the broader scope of enhancing your understanding of developments in the economy and to help you, and through you, the general public, to correctly analyse and disseminate information,” Dr Chipimo said.