Zambia Achieves Macro Stability as BoZ Cuts Policy Rate to 14.25%

Bank of Zambia Governor Dr Denny Kalyalya has stated that Zambia has reached a stage of macroeconomic stability. Speaking at the EU-Zambia Lobito Corridor Business Forum on Thursday, Dr Kalyalya noted that addressing the country’s high debt burden was the first step toward achieving stability. He highlighted that fiscal discipline has improved the business environment significantly.

“Four years ago, this country was in a very difficult situation, having defaulted on Eurobonds in 2020,” Dr Kalyalya said. “The first order of business was to address that debt overhang to restore macro stability.”

In line with improving economic conditions, the Monetary Policy Committee (MPC) reduced the Monetary Policy Rate by 25 basis points to 14.25% at its meeting held on 10–11 November 2025. Dr Kalyalya announced the decision during a press briefing at the Bank of Zambia on 12 November.

Inflation Trends and Outlook
Inflation continued its downward trend in the third quarter of 2025. It fell to 12.3% in September from 14.1% in June, and further to 11.9% in October. Key drivers included the continued appreciation of the Kwacha against major currencies and a bumper maize harvest, which lowered maize grain and meal prices. Despite this progress, inflation remains above the target band of 6–8%, and market expectations remain elevated. The MPC projects inflation to average 13.8% for 2025, up from 13.3% projected in August due to slower declines in food prices. From the second half of 2026 to Q3 2027, inflation is expected to decelerate faster than previously forecast.