February 21, 2018 / 10:15 AM / a year ago

UPDATE 1-Zambia's central bank cuts lending rate by 50 bps to 9.75 percent

(Adds quotes, details)

LUSAKA, Feb 21 (Reuters) - Zambia’s central bank cut its benchmark lending rate by 50 basis points to 9.75 percent on Wednesday, citing lower consumer inflation and weaker economic growth.

Bank of Zambia governor Denny Kalyalya told a media briefing inflation was expected to remain in the 6-8 percent target range over the next eight quarters.

“Economic activity has continued to improve but growth remains below potential,” Kalyalya said.

Preliminary data showed Zambia’s 2017 fiscal deficit at 6.1 percent of gross domestic product, below the budget target of 7 percent, Kalyalya said.

The central bank also said Zambian copper output increased by 1.6 percent to 786,731 tonnes last year.

“We are expecting to have a further increase in 2018 due to improved power supply,” Bank of Zambia Director of Economics Francis Chipimo told reporters.

In December, the government projected Zambia’s 2017 copper output to increase to between 800,000 and 850,000 tonnes due to more stable power supply. (Reporting by Chris Mfula; Editing by James Macharia)

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