has recorded steady growth this year com­pared to last year and re­quires up­scaled ef­fort to re­duce poverty and in­equal­ity, the Bank of Zam­bia (BoZ) has said.

BoZ Gover­nor Danny Kalyalya said growth for the first half of 2018 was 3.3 per­cent com­pared to 3.1 per­cent in the first half of last year.

He how­ever stressed that Zam­bia needed to grow much more strongly to re­duce poverty, in­equal­ity and achieve long term goal of be­com­ing a pros­per­ous mid­dle in­come coun­try by 2030.

Dr Kalyalya was speak­ing at a me­dia briefing in Lusaka.

“Mon­e­tary pol­icy in 2017 con­tin­ued to fo­cus on main­tain­ing in­fla­tion in sin­gle dig­its, with an end-year tar­get of 9.0%. With in­fla­tion fall­ing within the tar­get range and pro­jec­tions con­sis­tently point­ing to low in­fla­tion, the Bank eased mon­e­tary pol­icy to sup­port eco­nomic growth and min­i­mize fi­nan­cial sys­tem sta­bil­ity risks.

“The Bank re­duced the Pol­icy Rate to 10.25% by Novem­ber 2017 from 15.5% in 2016 and low­ered the statu­tory re­serve ra­tio to 8.0% in Novem­ber 2017 from 18.0% in 2016,”he stated.

He ex­plained that dur­ing 2018, mon­e­tary pol­icy re­mained ac­com­moda­tive and that in the first quar­ter the Pol­icy Rate was low­ered to 9.75 per cent from 10.25 per cent.

Statu­tory Re­serve Ra­tio was re­duced to 5.0 per cent from 8.0 per cent.

Dr Kalyalya stated that BoZ main­tained the rates dur­ing the year as pro­jec­tions showed that in­fla­tion would re­main an­chored within the tar­get range of 6-8 per cent in the medium-term.

“This pol­icy stance was and is still in­tended to sup­port eco­nomic ac­tiv­ity and con­tain some vul­ner­a­bil­i­ties af­fect­ing the fi­nan­cial sec­tor. In ad­di­tion, the de­ci­sion took into ac­count the pre­vail­ing high lend­ing rates, which con­tinue to con­strain ac­cess to credit, es­pe­cially by the pro­duc­tive sec­tors of the econ­omy.

“In the third quar­ter of 2018, we saw some ex­pan­sion in to­tal do­mes­tic credit, which grew by 9.9% driven by strong growth in lend­ing to pri­vate en­ter­prises and house­holds, and a pick-up in credit to Gov­ern­ment. In­creased de­mand for work­ing cap­i­tal by pri­vate en­ter­prises and lower in­ter­est rates on salary-backed loans to house­holds, partly ac­counted for growth in credit to these sec­tors, “he said.

Dr Kalyalya

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