The Bank of Zambia (BOZ) has reduced the Monetary Policy Rate (MPR) by 250 basis points to 10.75 percent, down from 13.25 percent, as the central bank responds to improving inflation conditions.

The decision was announced by BOZ Governor Denny Kalyalya during the third-quarter media briefing.

Governor Kalyalya said the reduction was driven by lower-than-expected inflation outcomes and improved inflation projections, which have created room for an adjustment in the country’s monetary policy stance.

He explained that the decision also takes into account identified upside risks to the inflation outlook, while seeking to align monetary policy with the improved inflation environment.

According to the Governor, the lower policy rate is expected to help support economic activity and growth, while maintaining focus on price stability.

The latest adjustment brings the MPR down by 2.5 percentage points from the rate maintained during the first quarter, signalling a shift towards a more supportive monetary policy environment.