Zambia raises key interest rate to 11 pct

LUSAKA, Nov. 22 (Xinhua) -- Zambia's central bank hiked its key interest rate by 100 basis points to 11 percent Wednesday to counter rising inflation.

Denny Kalyalya, governor of the Bank of Zambia (BoZ), said the government needs a robust policy response to anchor inflation expectations and bring it back within the 6 percent to 8 percent target band while addressing reporters in a quarterly press briefing.

Kalyalya also highlighted brighter growth prospects, citing the revision of the gross domestic product for 2023 due to higher-than-expected growth in sectors like information and communication technology, education, transport and tourism in the first nine months of the year.

The country's economy is projected to grow at a faster rate of 4.3 percent in 2023, up from the previous forecast of 2.7 percent, with further expansions anticipated at 4.7 percent in both 2024 and 2025.

Additionally, the central bank increased the statutory reserve ratio by 2.5 percentage points to 17 percent from 14.5 percent. Francis Chipimo, deputy governor of BoZ, explained in a statement that this move, the third increase this year, was prompted by persistent foreign exchange market pressures contributing to higher inflation.