Policy rate reduction pushes K10bn rate downwards

By BUUMBA CHIMBULUThe cutting of the interest rates’ benchmark by the Bank of Zambia (BoZ) has simultaneously re-priced the K10 billion stimulus package facility to 10.25 percent from 12.5 percent.The BoZ on Wednesday cut the Monetary Policy Rate by an aggressive 225 basis points to 9.25 percent from the previous 11.5 percent, levels last seen in 2012.Zambia joins other central banks such as the Bank of Ghana, Bank of Kenya, Central Bank of Nigeria, Reserve Bank of South Africa and Central Bank of Mauritius in a rate decision through the Covid-19 period that has eroded growth momentum.The 225 basis points rate cut eases the repayment burden for loan payments for borrowers while simultaneously re-pricing the central stimulus package to 10.25 percent from 12.5 percent, says Mutisunge Zulu, a Financial Analyst.Mr Zulu who had earlier predicted that the BoZ would cut rates to nine percent, said this reflected the growth prioritisation skew of the Central Bank […]