BoZ exhausts K5bn stability facility

THE Bank of Zambia (BoZ) says the K5 billion Stability and Resilience Facility (SRF) has reached full utilisation, marking a major milestone in efforts to support domestic production, strengthen energy security and cushion the economy against external shocks.

The central bank in December last year introduced the K5 billion Stability and Resilience Facility (SRF) to safeguard financial stability and strengthen the resilience of the financial sector following the adverse effects of the 2023/24 drought.

According to the latest edition of the Zambanker magazine, the facility had been fully disbursed as of March 31, 2026, successfully fulfilling its primary objective of injecting critical liquidity into key sectors of the economy.

“The SRF played a pivotal role in supporting energy solutions and productive sectors, including agriculture, forestry, manufacturing and other value chains, through targeted financing,” the BoZ noted.

It said the facility helped stabilise economic activity and improve resilience by directing resources to industries considered crucial for economic growth and recovery.

“The SRF has been instrumental in stabilising key energy solutions and economic activities across agriculture, forestry, manufacturing and other value chains through targeted resource allocation,” the report stated.

Meanwhile, the central bank reported that the kwacha continued its recovery, appreciating for a third consecutive quarter and closing 2025 at K22.80 against the United States dollar.

The local currency’s performance was attributed to improved foreign exchange supply, stronger investor confidence, sovereign credit rating upgrades, higher copper prices and progress made under the country’s International Monetary Fund Extended Credit Facility programme.

The report noted that foreign exchange inflows increased significantly during the fourth quarter of 2025, driven largely by contributions from foreign financial institutions and the mining sector.

Despite the positive developments, the central bank cautioned that growing geopolitical tensions and trade disputes remain a threat to the global economic outlook.

BoZ highlighted the escalation of conflict involving the United States, Israel and Iran as a source of concern, warning that disruptions to global supply chains and rising commodity prices could reverse recent economic gains.

“Prolonged geopolitical instability could reignite inflationary pressures and pose risks to economic growth both globally and domestically,” the central bank said.

Nevertheless, the successful deployment of the Stability and Resilience Facility and the sustained appreciation of the kwacha signal improving economic conditions as Zambia continues its path toward macroeconomic stability and recovery.