The Bank of Zambia -BoZ- has maintained the Monetary Policy Rate at 15.5 percent to address issues of volatility of the exchange rate.
Central Bank Governor Denny Kalyalya says the Monetary Policy Committee that met on February 11, 2016 resolved to halt the rising of the policy rate which was increased from 12.5 percent to 15.5 percent last year after looking at global economic developments.
Dr. Kalyakya says increasing the policy rate means tightening liquidity in the economy and that banks have to work hard to find liquidity which in turn affects the exchange rate.
Meanwhile , Dr Kalyalya has projected the Zambian economy to grow by 3.7 percent this year and 6.5 percent in the medium term.
He said the country’s economy last year grew by 3.6 percent the lowest in 10 years from projections of 7 percent.
Dr. Kalyalya said the International Monetary Fund projected a decline in global economic growth from 3.4 percent in 2014 to 3.1 percent in 2015 which was attributed to various factors including declining capital flows, weakening trade and a decline in comm
He said while oil and copper prices recorded a decline in prices on the international market, cotton recorded an increase in prices which is one of the areas that Zambia could look at.
Dr. Kalyalya has also projected inflation to reduce to round 15 percent in the medium term.
Meanwhile Dr. Kalyalya said the Central Bank released 763 million dollars from January to December last year and 808 million dollars in 2014 as part of foreign exchange support.