Announcement of the Bank of Zambia Policy Rate

 October 2012

At its September 2012 meeting, the Monetary Policy Committee decided to maintain the Bank of Zambia Policy Rate at 9.0% for October 2012.

During its deliberations, the Committee noted the following upward risks to overall inflation:
Labor related cost-push factors;
Rising international oil prices;
Rising feedstock prices; and,
The anticipated global grain deficit.

In addition, the Committee noted some weakness in the external performance of the economy owing to a slowdown in the global economy as a result of the on-going Euro zone debt crisis and the slow growth in China, India and the United States of America. However, the Committee was of the view that these threats may not have an immediate effect on the exchange rate and subsequently, inflation in the coming month.

Further, the Committee noted downward risks to inflation, to arise from the stability in the prices of vegetables and fish, reflecting an improvement in seasonal supply, coupled with relative stability in the exchange rate.

In view of the above, the Committee anticipates annual overall inflation in October 2012 to remain steady around the September level.

Given the foregoing, the Committee was of the opinion that inflationary pressures during the policy-relevant period will not pose a significant threat to the end-year inflation target of 7.0%. The Committee, in this regard, decided to maintain the Policy Rate at 9%.

The next meeting of the Monetary Policy Committee to review the Bank of Zambia Policy Rate will be held at the end of October 2012.

Issued by:

Head of Public Relations
Bank of Zambia
P.O. Box 30080


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