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BoZ Assures Nation “Interventions Have Been Put In Place to Stabilise Kwacha”

The Bank of Zambia yesterday assured that it was putting in place necessary interventions to stabilise the Kwacha that has slumped against the dollar in view of the United States’ decision to reduce the amount of its currency on the international market.

On Wednesday, the Kwacha hit a record low of K6 against the US dollar in over two decades.

The central bank, however, advised foreign market participants not to panic, adding that Zambia as well as other emerging markets have been affected by the US’s decision.

BoZ head of public relations Kanguya Mayondi said in a statement issued on Thursday that the reduction in the US dollar liquidity supplied through quantitative easing programme is affecting several emerging markets and Zambia is not an exception.

“Specifically, the Federal Reserve’s course of action has led to fears of slow growth of major emerging economies particularly, China,” Mr Mayondi said.

He said the price of copper, Zambia’s major export earner, remains subdued and is undermining investor optimism.

Mr Mayondi said the depreciation trend in the exchange rate observed overtime is also due to a combination of domestic and international market developments.

Mr Mayondi said the consistent economic growth Zambia has recorded over the years has led to a steady increase in imports, particularly capital goods for sustaining of the growth.

He said although exports have also continued to show impressive growth, demand for imports has relatively been stronger and is contributing overtime to the exchange rate depreciation.

Mr Mayondi said the bank has, however, observed that panic has gripped market participants and is undermining the smooth operation of the foreign exchange market.

Mr Mayondi said the central bank has tightened monetary policy to stay on course with the attainment of the inflation target of 6.5 percent.

He said liquidity-draining open market operations have been stepped up while the recent increase in the statutory reserve ratio is expected to take effect on Monday next week.

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Posted by on March 8, 2014. Filed under BUSINESS, LATEST NEWS. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

21 Responses to BoZ Assures Nation “Interventions Have Been Put In Place to Stabilise Kwacha”

  1. kayula Reply

    March 8, 2014 at 1:56 pm

    what do you expect when pipo are divided some promoting others praying for collapse of economy. God will see this govt thru. lets work togather we are all affected or stand aside as we move to promse land

    • Kenn Reply

      March 8, 2014 at 3:55 pm

      KAYULA STOP LIVING IN THE PAST.
      DOES PEOPLE UNITY MAKE THE CURRENCY STRONG?
      WHAT AN IDEA, doesn’t make sense.
      YOU KNOW NOTHING AT ALL LEVELS.
      ALL YOU COMMENTS ARE HISTORY, WHY?

  2. Kenneth Kaunda Obama Mbewa Reply

    March 8, 2014 at 2:43 pm

    This measure BOZ is talking about is just temporal what we need as Zambia is a long term solution and this SOLUTION lies in us as a country embarking on producing goods and service. we only export raw material. LETS move onto secondary level. assuredly speaking the state of the kwacha is a serious gain to those bringing in goods and a nightmere to those exporting. that way we shall curb this fast growing challenge. And this is what I expect our MPs in parliament to be looking at and not walking out

  3. jay Reply

    March 8, 2014 at 4:32 pm

    Quantitative easing

  4. Village Chicken Reply

    March 8, 2014 at 5:37 pm

    ‘Chikwanda: Rate at Which the Kwacha is Depreciating Is Not Very Worrying’
    Tumfweko 21 Feb 2014.

    Alex Chikwanda just three weeks ago was assuring us not to worry. Now its due to US Policy while Sata’s hiding the constitution is due to opposition MPs. These PF LIARS….!!!

    • id!ot! Reply

      March 10, 2014 at 10:21 am

      What has the constitution got to do with the exchage rate? Ubukopo!

  5. jamakudi Reply

    March 8, 2014 at 5:46 pm

    We warned pipo about this incompetent and dysfunctional govt. We ain’t seen nothing yet.

  6. mulipa Reply

    March 8, 2014 at 6:33 pm

    is Zambia becoming another Zimbabwe? hope nt!!!!!!!!

  7. Village Chicken Reply

    March 8, 2014 at 6:45 pm

    @ Mulipa, Sata dines with Gabriel Mugabe..

  8. pompwe Reply

    March 8, 2014 at 7:20 pm

    I really miss the days of Levy Mwanawasa (mhsrip)

  9. jamakudi Reply

    March 8, 2014 at 9:48 pm

    That’s right pompwe, Mwanawasa is greatly missed; that great son of Zambia.

  10. china Reply

    March 8, 2014 at 10:12 pm

    our President doesn’t have good team around him, hope
    he can wake up stop listening to them and demand they work, he is supposed to be a man of action

  11. kayula Reply

    March 9, 2014 at 5:54 am

    kenn i may not be an expert but internal & external factors are responsible and you kenn and govt are part of internal factors. read what happened to mexican peso in 1994.

  12. Chaona Reply

    March 9, 2014 at 8:42 am

    Levy may be dead, but Magande is still alive. Magande should be patriotic and the PF should be sincere, there is nothing wrong in consulting.

  13. me Reply

    March 9, 2014 at 11:40 am

    village chicken u are a chicken indeed. Demand and Supply plays a role in any economy. Your argument should be substantiated by evidence. The constitution has little or nothing to do with the exchange rate. We the Zambians are the ones to blame. We like foreign goods which makes our manufacturing industry to be useless and less effective thereby not exporting many things. Let the manufacturing industry florish and you will see a stable currency. Increase on exports to gain forex. Not some of this fingure pointing you are doing. Be reasonable. God bless every, God bless Zambia. God bless our great nation Zambia.

  14. jamakudi Reply

    March 9, 2014 at 3:10 pm

    My foot! State house is now cartoon network or Mr Flintstones.

  15. Me Reply

    March 9, 2014 at 3:55 pm

    The cause of the depreciation of the kwacha is definately due to low supply of forex in the country,so let’s look at it this way.assuming revenue from the huge sales of copper is not brought back to the country wat would happen? We claim that revenue from traditional exports has tremendously increased,is this revenue flowing in the country? Were is the 750 euro bond,assuming this money is released in the economy,what impact would it have? It will be difficult for us to export profitably,the cost of production will be higher as a result the products will not be competetive. solution,let us go the Kenya way on cutting down salaries for all political positions,this will create excess cash flow that can be used o support reduction of import duty.

  16. Jojo Reply

    March 9, 2014 at 5:46 pm

    Just remove some more Zeros and we are back to a good exchange rate……

  17. Watson Reply

    March 10, 2014 at 10:47 am

    I can’t even pay for my DStv, so sad.

  18. Trixy Reply

    March 10, 2014 at 11:44 am

    Me? I just look now. Tired of complaining. Just waiting for 2016 so that this Government know who the real bosses are. COUNTRYMEN WE ARE IN TROUBLE…REAL TROUBLE.

  19. muka chintalya mashi Reply

    March 10, 2014 at 5:03 pm

    Economics @ its best….These re dynamics of economics…BOZ knows beta than our assumptions….Lets work hard but opportunities for working hard have to be availed by the way policies are being framed up by our Govt. We love Sata but fi minister fi danderhead filelaka fye nokumweneshamo ba mudala kuchipango. Cud sum! point @ one minister who is creative. may Sampa, yaluma and mukanga re the few creative miniters. Retire chikwanda en appoint Miles Sampa with new technologies of our 3G…. Please Chikwanda out akota mudala tufuna new 3G Ba Bob Sichinga ukulandanda. He does not listen. Agriculture nayonaika

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