BoZ plays it safe in February
Kelvin Chisanga
By Kelvin Chisanga
The Bank of Zambia’s February Monetary Policy Committee meeting is expected to reinforce a cautious and stability-focused policy stance, reflecting the delicate balance between inflation control, exchange rate stability and economic recovery.
Inflationary pressures have shown signs of easing in recent months, supported by improved food supply conditions and relative stability in the kwacha.
However, inflation remains exposed to risks arising from fuel prices, climate-related shocks and global market volatility.
In this context, the central bank is likely to prioritise protecting recent disinflation gains rather than pursuing an aggressive policy shift.
The most likely outcome of the February meeting is the maintenance of the current Monetary Policy Rate, signalling policy continuity and predictability.
Holding the rate allows the Bank of Zambia to anchor inflation expectations while closely monitoring evolving domestic and external conditions.
Exchange rate stability is also expected to feature prominently in the policy narrative.
A stable kwacha helps contain imported inflation, supports investor confidence and reduces pressure on domestic prices.
As such, liquidity management and sustained foreign exchange inflows will remain critical policy tools.
From a growth perspective, policy stability provides space for economic recovery, particularly for the private sector, which continues to face high financing costs.
Any move toward monetary easing is therefore more likely to be gradual and data-driven, potentially later in the year if inflation trends firmly toward the 6–8 percent target band.
Overall, the February policy direction is expected to emphasise discipline, caution and credibility, reaffirming the Bank of Zambia’s commitment to price stability while keeping options open to support sustainable economic growth.
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