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BoZ to start monetary policy deliberations


THE Bank of Zambia (BoZ) will next Monday commence monetary policy deliberations, with some stakeholders predicting that it is likely to keep the benchmark rate unchanged at 9.5 percent despite price pressures.

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Denny Kalyalya, the central bank Governor is expected to announce the ruling benchmark interest rate on Wednesday after the meeting.

According to the Kwacha Arbitrageur, the rate decision meeting would likely focus on the rising risks to growth to include environmental headwinds such as El Niño weather forecast to impact power generation and agriculture output for 2023.

“Other exogenous factors that will be considered will include tight global monetary conditions as central banks seek to meet their inflation targets.

“The Russo Ukraine crisis could also impact the view on food prices in light of the Black Sea grain deal expiry which if not addressed will further dislocate global grain markets,” the Kwacha Arbitrageur stated.

The rate decision committee has this year cumulatively hiked rates 50 basis points to 9.5 percent and tightened the cash reserve ratio 250 basis points to 11.5 percent as the central bank sought to reign in on rising price pressures while simultaneously curbing an earlier currency slide.

According to the Kwacha Arbitrageur, 80 percent of a poll conducted of 20 economists saw likelihood of no change in the benchmark interest rate while four percent still anticipated a rate hike possibility by another 25 basis points to tame inflation.

From the last monetary policy committee meeting, sentiment was given a positive cue from a US$6.3 billion bilateral debt treatment elevating hopes of private debt restructure as the countries gears up for a more robust recovery.



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