Inflation Drop Prompts BoZ Rate Cut




Governor Danny Kalyalya highlights improved inflation outlook and continued macroeconomic support

Lusaka, Zambia24 — (12-11-2025) -- The Bank of Zambia (BoZ) has cut its Monetary Policy Rate (MPR) by 25 basis points to 14.25 percent, the first reduction in five years, following signs of easing inflation.

BoZ Governor Dr. Denny Kalyalya told journalists at a media briefing that the decision follows the Monetary Policy Committee (MPC) meeting on November 10-11, 2025, where the committee reviewed recent economic developments and the inflation outlook.

Inflation has been on a downward trend, falling from 14.1 percent in June to 12.3 percent in September, and further to 11.9 percent in October. 

The MPC said the slowdown is due to the Kwacha’s continued appreciation against the US dollar and a bumper maize harvest, which lowered prices for maize grain and maize meal.

Despite the decline, inflation remains above the government’s 6-8 percent target, with market expectations still elevated. 

The BoZ revised its 2025 inflation forecast upward to 13.8 percent from 13.3 percent due to slower-than-expected food price reductions. Inflation is expected to ease to 7.6 percent in 2026 and 6.6 percent in early 2027.

Dr. Kalyalya said factors supporting lower inflation include the Kwacha’s strength, lower fuel costs, cuts in residential electricity tariffs, favorable weather forecasts, higher copper export earnings, subdued global crude oil prices, and easing geopolitical tensions.

The MPC emphasized that future policy decisions will be guided by inflation trends, forecasts, and financial stability. 

The next MPC meeting is scheduled for February 9-10, 2026. The November Monetary Policy Report will be published on the BoZ website by the end of the month.

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