BANK of Zambia Governor Denny Kalyalya
BANK of Zambia Governor Denny Kalyalya

Bank of Zambia Governor Dr Denny Kalyalya has attributed the recent sharp depreciation of the Kwacha to the slowdown in the Chinese economy, the second largest economy after the US.

Dr Kalyalya said the Kwacha has come under immense pressure due to slow growth in China and emanating from global economic and financial market developments.

In a statement, Dr Kalyalya said commodity prices, including copper have dropped with the Zambian economy impacted adversely through the decline in the price of copper, which has fallen to around US$4,900 per tonne from above US$6,500 per tonne in 2014.

He said these developments apart from underscoring the long overdue need for the diversification of the Zambian economy to reduce dependence on copper, they also provide an opportunity for the country to take practical measures to respond to the challenges of diversification.

Dr Kalyalya said difficult as the situation is, it is an ideal time to actualise this structural transformation.

“The movements in the exchange rate are sending clear signals that our economy needs an expanded export base and a reduction in unnecessary imports. We all need to engage in expenditure-reducing and expenditure-switching activities going forward,” Dr Kalyalya said.

He said, “The global situation remains highly fluid. Under these circumstances, the Bank of Zambia deems the current monetary policy stance appropriate and will continue monitoring the developments closely and take other measures as the situation warrants and in line with its mandate.”

Dr Kalyalya said Zambia remains vulnerable to developments in the global economy adding that the balance of payments position has deteriorated reflecting a widening current account deficit.

He added that both traditional and non-traditional exports have declined significantly this year while imports have declined at a slower pace.

“As a result, the Kwacha has been on a depreciating trend. In addition, global investors have been anticipating that the US central bank would begin raising interest rates before the end of the year for the first time since 2006. As a result, emerging markets have experienced systematic net outflows of capital, creating pressure on their currencies to depreciate.”

[Read 21 times, 1 reads today]
Loading...

9 COMMENTS

  1. Mr. Kalyalya stop the crap. Excessive borrowing and rampant road construction expenditure has created an artificial demand for US Dollars and the Kwacha has suffered!
    Why is it that every time there is an international bond issued by Zambia the kwacha sky-rockets? There is a very strong co-relation!

    0

    0
    • Another educated regurgitator doing what he knows best. spewing out horse shiit but not offering real solutions. How many times have we said stop this madness of importing amafi everytime but you the same dumb arses welcomed chiluba with his liberalised economy knowing very well that our institutions hadnt matured enough to compete internationally. instead of proctecting our industries you let in the wolves and they ate up all the manufacturing companies we had. we started living off imports from that moment. instead of telling us, that we stop importing, tell you uncle chikwanda and his government. ka chikwanda with his imported suits and wines from france. You tell yourself that i will not wear imported suits evryday of the week instead on a wednesday and friday, i will wear to work a…

      0

      0
    • locally manufactured shirt and shoes as a way of reducing the dependence on imported stuff. dont just regurgitate do and practice what you preach. but since you dont do that, then it stands to reason that you do as you were taught, your education is a camouflage of your ignorance. Real education makes you learn about you and improves you and your environment. if wearing imported suits is killing your local industries,people how can it be that you a so called thinker can not understand this? And dont tell me pa kamwala they dont tunga ama shirt. that in the industrial area, they dont make shoes. start with yourselves imwebene, the people with the buying power the people with jobs. empower us by buying the shirst tu tunga pa kamwala.

      0

      0
  2. Zambians are good at singing the diversification song. KK was the first. In reality, nothing is happening. Very few Zambians living and working in towns have farms. Week-ends, it’s beer drinking

    0

    0
    • I agree, there is too much rhetoric with a regurgitation of presidential speech-writers. Zambians do not understand the value of hard work and constantly look for get-rich-quick schemes which never really pull off.

      0

      0
  3. The BOZ Governor, a Technocrat, has said it as it is. How then do we fail? My guess is there is too much politisizing of issues in our country, e.g. professionals not being given space to practise, preference being given to political correct individuals who in most instances say and do what the politicians want, etc. At least this man is inspiring.

    0

    0
  4. The word “lie” has been replaced with the word “politics”. Just look around you at how ingenious explanations of failure have become. Incompetence is all linked to something other than admission of guilt. Failure is blamed either on natural events (global warming, poor rainfall, etc.) or someone else’s ineptitude (the Chinese slowdown, the strengthening dollar, etc.). When will this nonsense stop? When are we going to look into ourselves and realize that we appear to be in a pack of whiners who will never move forward for as long as we are always blaming someone else even for our own ejacs….

    0

    0

Comments are closed.