Economist Kelvin Chisanga says the Bank of Zambia’s decision to reduce the Monetary Policy Rate (MPR) by 75 basis points, from 14.25% to 13.5%, will stimulate private sector-led investments.
He added that the move will encourage borrowing appetite in productive sectors such as agriculture, manufacturing, and SMEs.
In a statement, Thursday, Chisanga said the cut is expected to ease repayment burdens for borrowers, while savings accounts and fixed deposits may earn slightly less interest.
He said financial markets will adjust gradually, with short-term Treasury yields responding first and longer-term bonds following depending on inflation trends and policy expectations.
Chisanga cautioned that whilst the expansionary stance may support growth aspirations, it must be managed carefully during an election year to avoid risks of non-performing loans and inflationary pressures.
The Economist emphasised that the decision is designed to balance growth, price stability, and currency resilience, whilst promoting a gradual, data-driven repricing across the financial system.
