THE Bank of Zambia (BoZ) has maintained the monetary policy rate at 12 percent, Governor Michael Gondwe has said.
And the central bank says available indicators of economic activity suggest that Government is on track in meeting its growth objective for 2014, estimated at 6.5 percent.
Speaking at a media briefing in Lusaka yesterday, Dr Gondwe said inflationary pressures have remained and the central bank decided to maintain the policy rate at the current rate of 12 percent.
Dr Gondwe said measures taken by BoZ during the second quarter in tightening monetary policy have started bearing the intended results.
“The stabilisation of the financial sector provides an opportunity for BoZ to normalise money market conditions,” he said.
Dr Gondwe said measures taken to supply liquidity to the market through open market operations have now seen the interbank rate fall to 14.5 percent.
“The wholesale funding costs rose sharply during the second quarter, and the Bank of Zambia adjusted the effective interest rate margin which raised the lending rate ceiling to 28 percent from 21 percent. With the interbank rate having returned to levels consistent with the policy rate, the maximum annual lending rate ceiling has been adjusted down to 24 percent from 28 percent,” he said.
Meanwhile, Dr Gondwe says most of the selected real sector development indicators recorded higher output during the second quarter of the year.
Dr Gondwe said in the agricultural sector, the country continued to hold adequate maize stocks on the back of a bumper harvest.
He, however, said the stock of maize held by the Food Reserve Agency decreased by 20.3 percent to 343, 581 metric tonnes from 431, 130 metric tonnes at the end of March, 2014 due to domestic sales.
Zambia Daily Mail