Monetary policy rate likely to stay course at 9pc!

FROM the prevailing key indicators in the Zambian economy, it is more likely that we will be seeing the monetary policy rate to stay its course at nine percent due to the current happenings on both fiscal and monetary sides coupled with some perfect storms taking shape which are also poising to be manageable.

Key economic fundamentals are basically signalling positivity, and the proxy indicators as well as macroeconomic factors are equally posting comforting positions, of which this is clearly suggesting that the monetary policy rate should be maintained tomorrow by the Bank of Zambia though this appears to be a challenging fiscal year where we expect MPR to keep getting on an upward trend following the turn of global economic events.

It is well known that the central bank has for a long time taken an inflation target policy trajectory as it is strongly believed that the monetary policy framework takes a quicker force to tame inflation through open market operations with an objective to push FX sales.

The inflation out turn has a strong telling effect on the monetary policy direction and it looks like we are getting it right though possibilities of hiking the policy rate are sitting on the higher chances this year considering the dramatic global realities being in shape with the escalating global inflation, thus emanating from input costs on goods and services as well as cost of energy, obtaining from geopolitical tensions and Covid-19 new outbreak which now have stood out altogether as serious downside risks to the global economic growth patterns.