Zambia Cuts Key Policy Rate for 2nd Time

2026-02-11 10:00 By Erika Ordonez 1 min. read

The Central Bank of Zambia lowered its key policy rate by 75 basis points to 13.5% at its meeting on February 11, 2026, marking the second consecutive cut.

The annual inflation slowed sharply to 9.4% in January 2026 from 11.2% in the previous month, driven by the bumper maize harvest from 2024/25 and the appreciation of the Kwacha against major currencies.

Policymakers said inflation is expected to fall faster than previously forecast in November, with prices projected to enter the central bank’s 6%–8% target band by the second quarter of 2026 and reach the lower bound by mid-2027.

The Bank of Zambia added that its policy stance will continue to be guided by inflation developments, forecasts, and identified risks, including those related to financial stability, while maintaining a position supportive of macroeconomic stability.



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Zambia Cuts Key Policy Rate for 2nd Time
The Central Bank of Zambia lowered its key policy rate by 75 basis points to 13.5% at its meeting on February 11, 2026, marking the second consecutive cut. The annual inflation slowed sharply to 9.4% in January 2026 from 11.2% in the previous month, driven by the bumper maize harvest from 2024/25 and the appreciation of the Kwacha against major currencies. Policymakers said inflation is expected to fall faster than previously forecast in November, with prices projected to enter the central bank’s 6%–8% target band by the second quarter of 2026 and reach the lower bound by mid-2027. The Bank of Zambia added that its policy stance will continue to be guided by inflation developments, forecasts, and identified risks, including those related to financial stability, while maintaining a position supportive of macroeconomic stability.
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The Bank of Zambia reduced its key policy rate by 25 basis points to 14.25% at its regular meeting on November 12, 2025, implementing its first rate cut since August 2020. The move followed a continued moderation in inflation during the third quarter, as policymakers sought to ease monetary conditions while steering price growth back within the target range. Annual inflation eased to 11.9% in October, the lowest level in over two years, down from 12.3% in September. The central bank projected that inflationary pressures will keep moderating in the near term, with average price growth expected at 7.6% in 2026, slightly below the 7.7% forecast at the previous MPC meeting. Policymakers noted, however, that risks linked to external conditions and domestic supply factors remain.
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