LUSAKA, Nov. 22 (Xinhua) -- Zambia's central bank on Wednesday cut its benchmark lending rate in order to trigger interest rate reduction by commercial banks.
The policy rate was reduced by 75 basis points from 11.0 percent to 10.25 percent, according to the Bank of Zambia (BoZ).
Central bank governor Denny Kalyalya attributed the reduction to a continued decrease in the country's year-on-year inflation rate, the high cost of credit as well as low economic growth.
The central bank chief however expressed concern that commercial banks have been slow to reciprocate the gesture through reducing their lending interest rates.
"We have reduced the policy rate four times this year. However, commercial banks' lending rates have remained high and credit to the private sector has continued to be subdued," he told reporters during a press briefing.
The central bank also announced a reduction in the statutory reserve ratio from 9.5 percent to 8.0 percent.
