The Central Bank has attributed the depreciation of the Kwacha against other international convertible currencies during the first quarter this year to a high growth in imports relative to exports coupled with falling copper prices on the global market.
Bank of Zambia (BOZ) Governor Michael Gondwe said this has also been as a result of the investor sentiments associated with the strengthening of the United States (US) Dollar.
Dr Gondwe explained that similar weakening has been observed in most emerging market economies such as Ghana, South Africa and Turkey.
The bank governor said this in Siavonga yesterday when he officially opened the 15thBoz media workshop being held at Lake Kariba Inns in Siavonga, Southern Province.
Dr Gondwe however said the Central Bank would continue to implement a market determined exchange rates and has intervened to check volatility and accumulative reserves.
On the country’s overall macroeconomic performance, Dr Gondwe said Zambiahas performed generally buoyant compared to other countries in the region and the world economy in general.
Real Gross Domestic Product (GDP) growth was registered at 6.5 percent in 2013 from 7.3 per cent in 2012 meaning that, such growth was higher than 4.9 per cent and 3 per cent for sub Saharan Africa and the global economy in 2013 respectively.
“This growth was mainly driven by expansions in the transport, storage and communication, construction, insurance and financial institutions,” Dr Gondwe said.
Real GDP per capital has also increased from US$332 in 2000 to $655 in 2005 and $1,784 in 2013.
Dr Gondwe said more growth was required in order to have a lasting dent on high poverty levels and make growth more inclusive and equitably distributed among citizens.
He also explained that, inflation has declined from double digits of the early 2000s to single digit levels currently at 7.1 per cent in 2013 from 2012 in December 2012.
This represents a percentage point of 1.1 per cent well above the end-year target of 6 per cent.
During the first four months of 2014, Inflation rose from 7.3 per cent to 7.8 per cent in April and this was mainly attributed to seasonal inflationary pressures associated with high fuel and food prices during this time of the year as well as pass through effects of the exchange rate depreciation.
Dr Gondwe also said owing to the general decline in in the rate of inflation, interest rates were expected to come down as well.