Central Bank of Zambia Lowers Interest Rates

2026-05-13 10:17 By Joana Taborda 1 min. read

The Bank of Zambia lowered its key Monetary Policy Rate by 25bps to 13.25% at its May 2026 meeting, bringing borrowing costs to their lowest level since mid-2024.

Policymakers cited expectations of a favourable maize harvest during the current crop marketing season, along with the relative stability of the Kwacha against the US dollar, as key factors supporting a more benign inflation outlook.

These developments are expected to help keep inflation anchored within the central bank’s 6–8% target range.

However, the central bank also highlighted persistent upside risks and heightened uncertainty linked to the ongoing conflict in the Middle East, prompting a cautious approach to monetary easing in order to maintain an appropriate monetary policy stance.

Inflation is expected to remain within the target band and average 6.8% in 2026 and ease to 6.1% in 2027, before edging up to 6.6% in Q12028.

Zambia’s annual inflation rate slowed to 6.8% in April, its lowest level since February 2018.



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Central Bank of Zambia Lowers Interest Rates
The Bank of Zambia lowered its key Monetary Policy Rate by 25bps to 13.25% at its May 2026 meeting, bringing borrowing costs to their lowest level since mid-2024. Policymakers cited expectations of a favourable maize harvest during the current crop marketing season, along with the relative stability of the Kwacha against the US dollar, as key factors supporting a more benign inflation outlook. These developments are expected to help keep inflation anchored within the central bank’s 6–8% target range. However, the central bank also highlighted persistent upside risks and heightened uncertainty linked to the ongoing conflict in the Middle East, prompting a cautious approach to monetary easing in order to maintain an appropriate monetary policy stance. Inflation is expected to remain within the target band and average 6.8% in 2026 and ease to 6.1% in 2027, before edging up to 6.6% in Q12028. Zambia’s annual inflation rate slowed to 6.8% in April, its lowest level since February 2018.
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