LUSAKA, Feb. 21 (Xinhua) -- Zambia's central bank on Wednesday cut its benchmark lending rate by 50 basis points on account of continued reduction of inflation and weak economic growth.
The Bank of Zambia (BoZ) reduced the rate to 9.75 percent from 10.25 percent.
Denny Kalyalya, the central bank governor, said the Monetary Policy Committee that met on Monday decided to reduce the rate due to the low inflation outturn and projections that it will remain within the medium-term target range of 6 to 8 percent, as well as subdued economic growth.
The committee, he said, also considered the prevailing high interest rates, which have continued to constrain access to credit by the productive sectors, and risks to the stability of the financial sector.
"Interest rates have broadly maintained a downward trend although commercial banks' lending rates remain high. Economic activity has continued to improve, but growth remains below potential," he told reporters during a press briefing.
The central bank also reduced the statutory reserve ratio by 300 basis points to 5.0 percent from 8.0 percent.