The Bank of Zambia has maintained the same Monetary Policy Rate and Statutory Reserve Ratio again in a bid to induce lower interest rates and revive economic growth.
Speaking during a media briefing in Lusaka, Wednesday, BoZ governor, Dr Denny Kalyalya, announced that the central bank decided to maintain the Monetary Policy Rate (MPR) at 9.75 per cent, while also keeping the Statutory Reserve Ratio (SRR) at five per cent.
The MPR is the benchmark lending rate the central bank sets on commercial banks to either increase or decrease interest rates on credit facilities, while the SRR is the proportion of deposits a commercial bank, by law, must keep in cash or place with the central bank.
Dr Kalyalya explained that the central bank decided to maintain the MPR and SRR to help induce the lowering of high interest rates that are above 24 per cent, and to boost economic growth that remains sluggish.
“We further noted that, growth remains sluggish partly on account of subdued credit growth to the private sector. Financial fragility was also noted as an ongoing concern as Non-Performing Loans (NPLs) remain high. The lending rates, the trend of declining has stalled. Part of the message we are sending is that, we want more activity to happen,” Dr Kalyalya told journalists at the central bank.