Zambia central bank cuts main lending rate by 125 bps to 8.0%


LUSAKA (Reuters) – Zambia’s central bank cut its benchmark lending rate by 125 basis points to 8.0% to safeguard financial sector stability and protect livelihoods in the wake of the COVID-19 pandemic, it said in a statement on Wednesday.

The bank added that inflation was expected to steadily decline and reach the upper bound of its 6%-8% target range by the end of its forecast horizon.

It now expects gross domestic product to contract 4.2% this year, more than an earlier forecast for a contraction of 2.6%.

Reporting by Chiwoyu Sinyangwe; Writing by Alexander Winning; Editing by Olivia Kumwenda-Mtambo