(Adds more inflation detail and context paragraphs 3-7)
LUSAKA, Feb 15 (Reuters) - Zambia's central bank raised
its key interest rate on Wednesday for the first time since
November 2021, increasing it by 25 basis points to 9.25% as it cited a deteriorating outlook for inflation.
The Bank of Zambia said inflation was now expected to remain
above the 6%-8% target band throughout the forecast horizon,
which runs until the last quarter of next year.
That contrasts with forecasts in November 2022 which
indicated that inflation would return to the target range in the
first quarter of 2024.
In January, annual inflation was 9.4% .
Central bank governor Denny Kalyalya told a news conference
inflationary pressures were linked to the swift, recent
depreciation of the country's kwacha currency , an
anticipated increase in electricity tariffs and a possible
reduction in maize output.
Zambia, a major copper producer, was the first country in
Africa to default on its sovereign debt during the COVID-19
pandemic, and debt restructuring negotiations with its creditors
have been delayed.
"Negative sentiments arising from the protracted debt
restructuring negotiations, working through the exchange rate
channel, are expected to add to inflationary pressures," the
bank said.
(Reporting by Chris Mfula
Editing by Alexander Winning and Helen Popper)
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