In­ter­est rate raised to 12.5%

The Star Early Edition - - BUSINESS REPORT/INTERNATIONAL -

ZAM­BIA’S cen­tral bank raised its bench­mark in­ter­est rate by half a per­cent­age point to 12.5 per­cent yes­ter­day, the third in­crease this year. In­fla­tion would re­main at el­e­vated lev­els into next year, gov­er­nor Michael Gondwe, said. In­di­ca­tors sug­gested the econ­omy would prob­a­bly ex­pand 6.5 per­cent this year, he said. Kwacha, the cur­rency of Africa’s sec­ond-largest cop­per pro­ducer, has dropped 5.4 per­cent against the dol­lar since the be­gin­ning of Septem­ber, adding to pres­sure on in­fla­tion. Con­sumer prices rose 7.9 per­cent last month from a year ago. “Our forecasts are that in­fla­tion will re­main at th­ese el­e­vated lev­els through­out the rest of the year and into 2015,” Gondwe said. The kwacha gained 0.62 per­cent and traded at 6.32 a dol­lar as of 12.35pm in Lusaka yes­ter­day. – Bloomberg

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