The Economics Association of Zambia (EAZ) says the decision by the Bank of Zambia to maintain the Monetary Policy Rate (MPR) at 14.5 percent reflects a cautious but confident approach to monetary policy management.
EAZ President, Dr. Oswald Mungule, states that this stance signals the Central Bank’s intention to sustain a tight but non-restrictive policy posture—balancing recent improvements in inflation dynamics with prevailing macroeconomic risks.
Dr. Mungule adds that the slight reduction in annual inflation from 16.8 percent in February to 16.5 percent in April 2025, although modest, indicates early signs of disinflationary momentum.
He further notes that the decision not to adjust the policy rate demonstrates the Bank’s confidence that existing monetary conditions are sufficient to support the current inflation trajectory.
According to Dr. Mungule, by holding the policy rate steady, the Bank has provided predictability for economic agents, thereby supporting business planning and reducing uncertainty in the credit market. He also highlights that this decision allows the economy to absorb and adjust to the cumulative effects of previous tightening cycles without imposing additional constraints on private sector activity and investment.
