Zambia's central bank left its key interest rate unchanged on Wednesday, after raising it in May, as it expects inflation to remain above its target and growth prospects to weaken in the near term.
The Monetary Policy Committee decided to hold the rate steady at 10.25 percent at its August 19-20 meeting, Bank of Zambia Governor Denny Kalyalya said in a statement.
The previous change in the rate was a 50 basis point hike in May.
"The Committee may adjust the Policy Rate upward, if inflation does not revert to the target range," Kalyalya said.
The bank projected inflation to remain above the upper bound of the 6-8 percent target range for much of the forecast horizon and to return to the target range towards the end of the forecast period.
Policymakers also pointed out the further weakening of near-term growth prospects, liquidity challenges, and risks to financial stability.
Further, tackling large fiscal deficits, elevated debt and debt service levels, high domestic arrears, and liquidity challengers remains critical, the bank said.
The next rate-setting session is scheduled for November 18-19.