Q FM Africa's Modern Radio
The Bank of Zambia has maintained the benchmark lending rate at 12.5 percent, saying it predicted inflation would breach the regulator’s target by the end of the year.
Central Bank Governor Denny Kalyalya has told a media briefing in Lusaka this morning that inflation is projected to be slightly above the end year target of 7.0 percent in the third quarter of 2015.
Dr Kalyalya says Consumer prices declined marginally to 7.1 percent year-on-year in June from 7.2 percent in May, due mainly to tight monetary condition.
He added that the country’s economy will benefit from government interventions to stabilize the economy.
This follows government’s intervention last week to restore electricity supply to mines amid a power deficit.
Dr Kalyalya says the central bank welcomes these actions by the government, as fiscal consolidation along with monetary policy action will support macroeconomic stability and growth.
He was making reference to plans by the government to cut non-essential expenditure in the wake of a K20 billion budget deficit.