The Bank of Zambia Monetary Policy Committee cut the Monetary Policy Rate by 25 bp to 13.25 percent at its 11–12 May 2026 meeting, judging that a favourable maize harvest and a recently stronger, more stable kwacha will keep inflation within the 6–8 percent target band while acknowledging upside risks from higher global oil prices linked to the Middle East conflict and a potential El Niño. The move extends an easing cycle that has lowered the rate by a cumulative 100 bp since November 2025, including a 75 bp reduction in February 2026. No changes were announced to other operating tools or liquidity conditions. Headline inflation fell to 6.8 percent in April after averaging 8.0 percent in Q1 2026 (11.3 percent in Q4 2025) and is forecast to average 6.8 percent in 2026 and 6.1 percent in 2027 before edging up to 6.6 percent in Q1 2028, aided by lower maize prices and the stronger currency, though recent domestic fuel price increases reflect global crude developments. The kwacha’s appreciation has steadied, and temporary tax relief on petroleum products is moderating energy costs. Persisting geopolitical tensions and weather-related supply risks remain key threats to the inflation path, and the central bank said future rate moves will hinge on inflation outcomes, projections and financial-stability risks; the next MPC meeting is set for 28–29 September 2026.
Bank of Zambia 2026-05-13
Bank of Zambia cuts Monetary Policy Rate by 25 bp to 13.25%
Bank of Zambia cut its policy rate by 25 bp to 13.25 % at the 11–12 May 2026 MPC meeting, extending a 100 bp easing cycle since November 2025 while leaving other instruments unchanged. The move reflects a stronger kwacha and favourable maize harvest keeping inflation within the 6–8 % target (April 6.8 %), though risks from global oil prices and potential El Niño persist; next review is scheduled for 28–29 September 2026.