policy rateThe Bank of Zambia is loosening its tight grip on monetary policy by lowering the policy rate for the first time since its introduction in March 2012, from 15.5% to 14.0%, and by reducing the statutory reserve ratio from 18.0% to 15.5%. The move signals that the economy has stabilised somewhat as reflected in a stable exchange rate and a reduced inflation rate.

The policy rate is the base rate used by banks to calculate their interest rates.

The statutory reserve ratio is the minimum amount financial institutions must maintain as liquid funds to ensure their liquidity.