An Economist in Luapula Province has expressed confidence that the prices of goods and services will stabilize following the increase in the Monetary Policy Rate (MPR) by the Bank of Zambia (BOZ).
The Bank of Zambia announced a 50-basis-point increase in the monetary policy rate, raising it to 14 percent. The adjustment, made by the Monetary Policy Committee, is intended to address inflationary pressures.
Reacting to the decision by BOZ, economist Danny Mpasa notes that while the higher MPR will lead to increased borrowing costs from commercial banks, it remains the most effective way to control inflation and stabilize prices.
“The increase in the MPR will help keep inflation under control and stabilize prices,” said Mr Mpasa.
“Although higher interest rates and reduced borrowing might limit liquidity in the economy, this measure will ease the pressure on the kwacha and provide relief.” He added.
Mr Mpasa adds that despite the restricted liquidity in the economy, the move is likely to slow the depreciation of the kwacha against major international currencies, bringing some financial stability.
Meanwhile, Business and Development Expert Emmanuel Munsanje has urged civil servants to avoid taking high-interest loans in light of the adjusted MPR but rather adopt a savings culture.
Mr. Munsanje warned that relying on expensive loans could lead to financial difficulties and frustration among government workers.
“With commercial bank loans becoming more costly, I urge government workers to explore alternative financing options provided by government programmes such as the CEEC and CDF, which have more affordable lending rates,” said Mr. Munsanje.
Mr. Munsanje also commended the government for awarding civil servants a pay rise of K500 across the board.
With so many learned Economists scattered hroughout zambia
I am going to zip it
Without serious efforts to end the crippling blackouts, such measures will amount to naught.
Civil servants can get cheaper loans but what about ordinary people?