THE Bank of Zambia (BoZ) says it remains alert on the Kwacha performance as it continues to monitor the sharp recovery process from a shocking slump that hit a record high of over K7 against the dollar recently.
The BoZ said it would continue to address the key structural constraints in the financial sector and make the inter-bank foreign exchange market more efficient.
BoZ Governor, Michael Gondwe was confident of achieving the set objective of a flexible and market-determined exchange rate that reflected market fundamentals and promoted macroeconomic stability.
The Kwacha was now trading at around K6.4 against the dollar and it was expected that with financial interventions introduced by the Central bank, the local currency would continue to show signs of recovery.
“We are confident that efforts to develop our financial markets and make the interbank foreign exchange market more efficient, coupled with the continued strong growth in non-traditional exports, will promote a diversified supply of foreign exchange and help achieve greater resilience in the foreign exchange market,” Dr Gondwe said.
Dr Gondwe said in a statement issued in Lusaka yesterday that as a result of additional measures implemented on May 30, this year, the exchange rate had shown signs of stability over the past week.
Giving an update on developments in the foreign exchange market and measures taken to stabilize the Kwacha, Dr Gondwe assured that Zambia’s economic fundamentals remained sound and that the rate at which the Kwacha depreciated was not consistent with economic rudiments.
Dr Gondwe said the targeted 6.5 per cent end-year inflation remained on course despite indicators showing it was pegged at 7.8 per cent last month with contributing factors causing the rise, being the depreciation in the exchange rate.
This, he based on higher food prices during the period between October, last year and March this year, prior to the crop harvest and the increase in fuel prices and the more recent announcement of electricity price hikes, which would exert inflationary pressures.
“Having said this, we are confident that the increased investment in the electricity sector supported by economic tariff rates will bring the benefit of higher exports and more stable power supply, which ultimately will support export diversification, exchange rate stability, greater productivity in industry and lower inflation,” Dr Gondwe said.
We shouldn’t have been here in the first place if the stewards of the economy were not asleep at the wheel. Anyway we have heard these assurances before and soon after the kwacha skyrocketed. So don’t pat yourselves on the job well done when you messed up yourself in the first place.
Usually the guy holding the gun in the back ground is never visible. Am just saying in retrospect. Is it true???
BOZ had said they were releasing some forex reserves. Since there are no reserves remaining, it is likely being supported from the Eurobond. The gain is not backed with any sound economic foundation and is therefore temporary. The Kwacha will be back on the death bed when Eurobond is exhausted, and that is sooner than later.
This PF govt is ten steps of politics and one hesitant step of economically blind measures.
6.5% end year inflation target is a ridiculous joke. How exactly will inflation drop to 6.5% when the cost of living is becoming unbearable under the once trusted PF regime? Fuel pump price has gone up, electricity tariffs have been increased and this governor has the audacity to run his mouth about the 6.5% inflation dream. Jokers!
As a common man on the streets of Lusaka, I am not well vested in issues of economic policy. Therefore, what are these measures? Even I can tell that there is something missing in the manner this information is being dispensed.
These guys are reactive- never proactive. They are crazily (and blindly) paddling us into the distant unknown. Toward a gaping abyss…..
PABWAATOOOOOO!!! DONCHI KUZIBA!!
we have heard this before..same stories being told peddling lies ………just a piece of utter trash.
kicks of a dying horse…..Come 2016 kuya bebele…..
Well done brother Gondwe, well done PF. Remember to ask God for wisdom and guidance and I promise you will continue shaming the critics who think they know it all.
25KG MEALIES TO BE RE-BASED TO 25K!!!
The Kwacha will surely stabilize with time.
With successive bumper harvests, ba Mudala will ‘RE-BASE’ the 25Kg of mealie meal to 25K next year which will put the last nail in the coffins of the opposition and consign them to the dustbin of political irrelevance for ever.
@Premier
That would be good if mealimeal price, electricity, fuel and the Kwacha was to be reduced to levels when Mwanawasa was the president.
For now you and I know very well that what you are saying is an impossibility and I am right dismiss it as wishful thinking.
However its not all gloom and doom for PF if they can collectively get rid of Sata from the helm of power . Only then can PF begin to correct their mistakes and begin to win people back.
As things stand at the moment, PF has lost support from people who do not benefit from PF directly. And some people whose jobs rely on PF have also started to doubt Sata’s credibility to rule. The PF’s political fortunes have completely been decimated beyond repair.
Only UPND and HH have what it takes for Zambia to be restored.
I gave my vote to PF, but trully I blame myself today, because I now believe what I did was foolish if only I knew the outcome of PF coming into power I would have distanced my vote from PF but now it is late but not too late to make ammends, I have 2016 within my reach and I hope I and a lot of other Zambians will not be foolish again.
If the measures being implemented now by the central bank to resuscitate the ailing Kwacha are factual then the people of Zambia particularly the bloggers on online fora deserve congratulations for exerting pressure on the authorities to wake up from their slumber. In developed countries the masses would even go further by organising demonstrations.
We would like to the know measures, you can find these guys are waiting on luck
@Wanzelu
Fuel prices shall never come down because even Iran, the oil producer, has just removed subsidies and increased its fuel price.
Who is Levy? Do u mean the guy who could not even afford office rentals for his legal firm? He was operating from his house. He sold KCM for a pastry $25m, the price of Chilala’s house….
Chiluba’s house was a union property.
RB was struggling with life in rural Katete.
Luapula’s lamentation is that if this Madala had taken over from KK, our Zambia could have be enjoying the same status as Ruanda, Kenya & Botswana in infrastructure advancement.
Never again shall Zambia be allowed to be messed up by these teenagers whose preoccupation are only nice suits, girlfriends once in power!
@Wanzelu
“The PF’s political fortunes have completely been decimated beyond repair”. Really!
Kindly, take a drive and visit us in rural Luapula, and try to extend your tour to places like Kaoma like I did.
The PF’s political fortunes have completely been decimated…? Why?
1. Cos hundreds of our compatriots are back in their jobs at ZR!
2. Cos Zambia Railways is running again!
3. Cos our national airline is about to take off from a new state of the art airport!
4. Cos Livingstone and Choma are being turned into metros!
5. Why do you think the pastor is not even talking about “new districts”?