Zambia’s annual inflation cooled to its lowest level since November 2023 as currency appreciation helped curb the cost of imports, strengthening the case for the central bank to cut interest rates.

Consumer prices rose 13% in July compared with 14.1% a month earlier, Acting Statistician-General Sheila Mudenda told reporters Thursday in Lusaka, the capital.

Africa’s second largest copper producer is reaping the benefits from a surge in the price of the metal. That’s led the kwacha to appreciate almost 21% against the dollar since the start of the year — making it one of the world’s best-performing currencies among those tracked by Bloomberg.

Annual food inflation decelerated to 15.3% in July from 16.7% a month earlier and non-food price growth cooled to 9.7% from 10.3% in June. Prices rose 0.1% in the month.

The continued deceleration in inflation makes a solid case for the Bank of Zambia to cut its key interest rate when policymakers meet next month, after keeping it on hold at 14.5% in May.

Inflation has been above 8% - the upper limit of the central bank’s target band — since 2019. The monetary authority expects it to return to target in the first quarter of 2027 and average 13.8% in 2025 and 8.8% next year.