Bank of Zambia Cuts Interest Rate to 13.5% as Inflation Slows

Zambia cuts interest rates again as inflation falls faster than expected and currency stability strengthens recovery.

The Bank of Zambia has reduced its benchmark interest rate to 13.5% from 14.25%, marking its second consecutive rate cut. The decision follows signs that inflation is easing more quickly than expected, supported by a stronger kwacha and improving macroeconomic conditions.

Inflation dropped to 9.4% last month, falling below 10% for the first time in nearly three years. The central bank of Zambia expects inflation to return to its 6%–8% target range sooner than projected. The kwacha has appreciated about 16% against the US dollar this year, lowering the cost of imports such as fuel and food.

While risks remain, including weather-related food shocks and global uncertainty, policymakers say fiscal discipline and stronger foreign exchange reserves are stabilizing expectations.

The rate cut is expected to reduce borrowing costs, boost credit growth, and support Zambia’s recovery, driven partly by mining expansion and debt restructuring.

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