Central Bank urged to increase Monetary Policy Rate

Economist Michelo Maunga is proposing that the Bank of Zambia slightly increases the Monetary Policy Rate by 0.25 to 0.5 percent due to the depreciation of the kwacha.

Maunga is of the view that increasing the rate will attract more investors in the country especially that Zambia is a more risky environment hence investors need to be offered more in order to prioritize Zambia as an investment point.

He says if investors are getting the same rate in Zambia as they are getting in other countries like the United States of America, they will not be motivated to invest in the country, a situation which could cause money to leave the country and reduce the value of the local currency.

In an interview, Maunga said with the current global conditions, economies are raising their interest rates hence it will be important for the central bank to slightly increase the Monetary Policy Rate from the current 9 percent to help the depreciating Kwacha and safeguard against inflation. Phoenix