The Central Bank of Zambia raised the benchmark interest rate by 50 bps to 10.25% at its May 22nd 2019 meeting. The decision came as some upside risks to inflation have begun to materialise, including lower maize output, continued elevated fiscal deficits, high debt service payments and the decline in gross international reserves, which are also exerting severe pressure on the exchange rate. In April 2019, headline inflation rate increased to 7.7% from 7.5% in the prior month and it is projected to rise above the upper bound of the target range of 6-8% over the next year. Policymakers added that indicators of economic activity point to subdued economic growth; the real GDP is expected to slow down in 2019, reflecting lower agriculture production and mining output as well as electricity generation constraints. Interest Rate in Zambia averaged 10.25 percent from 2012 until 2019, reaching an all time high of 15.50 percent in November of 2015 and a record low of 9 percent in May of 2012.
Interest Rate in Zambia is expected to be 10.25 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Zambia to stand at 10.25 in 12 months time. In the long-term, the Zambia Interest Rate is projected to trend around 10.50 percent in 2020, according to our econometric models.