ZIPAR welcomes reduction of policy rate

ZIPAR Senior research fellow Caesar Cheelo

The Zambia Institute for Policy Analysis and Research (ZIPAR) has described the move by the Bank of Zambia to reduce the policy rate from 15.5% to 14% as a step in the right direction.

ZIPAR Senior research fellow Caesar Cheelo notes that the reduction policy coupled with the reduction of the overnight facility rate and the statutory ratio will make a substantial contribution to lowering the lending rates.

Mr. Cheelo says the measures are good for simulating lending to the private sector, but however, notes that the move will not fully resolve the interest rate problems.

He states that the Bank of Zambia will need to initiate serious reforms that restructure the commercial banking sector if the move has to significantly increase the amount of liquidity in the financial market towards private sector credit extension.

Mr. Chello has however, commended the bank of Zambia for the move it has taken to revise the policy rates downwards.