Government has warned that it could resort to foreign exchange controls if the free fall of the Kwacha continues.
Special Assistant to the President for Press Amos Chanda stated that President Edgar Lungu will not allow the Kwacha to collapse because of what he called a false belief in a free market economy.
Mr Chanda blamed the rapid deterioration of the Kwacha to speculative behaviour by some market players.
“What we have seen is that from the time the Kwacha was around 8.5 to a Dollar, all the movements upwardly have been influenced by speculators who are holding off,” Mr Chanda said.
He was speaking Sunday evening when he featured on ZNBC TVs Sunday Interview programme.
“We are not yet at a point where we could think that the financial markets have broken down irretrievably. We think that speculative behaviour by some players has put the kwacha under pressure,” Mr Chanda said.
He added, “Because for the long time when contractor and other producers were unable to be paid by government there was cash problem in the economy but we don’t think there is cash problem for both for the dollar and the Kwacha.”
Mr Chanda explained that the problem was that in some circles there was sentiment that under no circumstance would government intervene to arrest the free fall of the kwacha.
“But am here to state that the President cannot allow the national currency to collapse because of the false belief in free market economy fixing themselves even when things are clearer that the market won’t fix itself.”
He added, “So the President could intervene through the treasury off course, allowing the central bank to regulate if the markets don’t behave properly, there are exchange controls as a measure.”
He said exchange controls means that restricting key sectors of the economy access to foreign exchange.
“Not to intervene as a matter of currency intervention, it is to restrict very essential productive sectors to have access to the dollar in order to have sufficient liquidity in the market, if that fails, that is why the Bank of Zambia keeps what is called strategic reserves, those strategic reserves are meant to protect the economy in an emergency situation, no options are off the table,” Mr Chanda said.
Asked if the Kwacha would go beyond the K15 to a US dollar mark, Mr Chanda emphatically said the Kwacha will not get any worse.
“The Kwacha will not get any worse than it is and if it does, like I have said, the government is not asleep and it will come in to ensure that there is reasonable equilibrium.”
Mmmmmmmmm..its threats now?,I am failing to understand why the President himself or the Finance Minister cannot address the Nation on these very important factors negatively affecting our Economy.The speculative motive Mr Chanda is referring to is due to President Lungus’ failure to inspire that much needed confidence in the economic management of this country.The blame game these guys are playing is really hurting our economy.Anyway from the time the PF took over govt. in 2011, they have really shown their incompetence in as far as governing a country is concerned.
Lets wait and see how far their arrogance will take them!!!!!!!!!
Spot on Wadala.
Why sending a journalist to answer economic questions? I think the Minster of Finance or Commerce would’ve been more appropriate.
In any case, the president being the CEO charged with the responsibility of managing our national affairs is the best person to address the nation on the sate of the economy and mitigating measures government is employing.
Don’t these PFools learn? The free fall of the Kwacha started when they introduced FX controls with SI33 and 55 in 2012. If they bring back exchange controls, expect the Kwacha to go to K100/$ and then to be replaced by the US dollar as official currency before 2020. The Zambian economy will collapse faster than Zimbabwe.
Amos is just fueling the speculation. Surely ECL can’t take a few minutes from his drinking schedule to come and talk to us.
The biggest problem we face now is one of perception. Everyone & everything has lost confidence in the system. Speculators thrive in such chaotic environments.
If you are introducing exchange controls, do it. Don’t threaten. That way you look indecisive & unsure.
If you cannot dazzle them with your brilliance baffle them with your bull
I’m waiting to hear the views of one Senior Citizen on this matter. Waiting.. 10, 9, 8, 7 ……….
This is now sounding like UNIP 2.
How does this work in a liberal economy?
Not a good sign for PF.
What did you expect from a UNIP fossil Finance Minister?
Soon we will be back to nice shopping malls with empty shelves. ZCBC all over again!
Two or three block queues for soap and cooking oil.
We are certain in reverse gear under PF. Such statements only induce more purchases of dollars by creating more uncertainly. State House should either have the president speak out himself or leave it to BOZ and MOF.
Good luck Zambia. Ifintu Ni Lungu
This really shows how incompetent and STUPlD these PF clowns are!
Do they not know that a statement like this is GUARANTEED to make the Kwacha depreciate even further!
If this Amos Chanda was not specifically told by Lungu to say this on National TV he should be fired IMMEDIATELY FORTHWITH!
Nzelu monga Kaunda. Nxaaaah!!!!
Atase, they have the audacity to threaten us. They should start by not sending every Tom, Dick and Harry to Morningside with the latest being Mr Ngoma
Well done Mr. Chanda. That is exactly WRONG thing to say. Instead of confidence building, your statement has obtained opposite result. What a bunch of uneducated pillocks are advising President.
things are falling apart and the best they can do is to send a journalist to address the nation. what a mediocre government
Comment:
Wait a minute, what about Dennis Kalyalya , what contribution has he made, or maybe he is a member of the cartel?
Comment:
Wait a minute, what about Dennis Kalyalya, at BOZ, what contribution has he made, or maybe he is a member of the cartel?
some people are just figureheads who become dunderheads despite having worked at World Bank!
Comment:
Wait a minute, what about Dennis Kalyalya, at BOZ, what contribution has he made, or maybe he is a member of the cartel? 2
Mr Amos Chanda presented himself very well and most of Zambians were satisfied and impressed with his good articulation of issues.He made things very clear.Those who yap against the govt aimlessly were told off.
ECL is man of the people and will be voted for again in 2016.
@ Eagle’s eye
Please stop abusing alcohol and weed. It damages your eye sight to the point that you live in “virtual world” where PF its full of achievements, constant electricity supply and 10 USD to 1 Kwacha.
The Cartel and their ka biased newspaper were told off .Keep it up Mr Chanda !
@Julius
You forgot to say that even up and down tribal party was also told off.They think they can create water to generate electricity.
Chanda needs to read some history. Maybe even catch up with world news.
He should try googling George soros and Venezuela before he opens his mouth again.
THIS SITUATION WILL NOT SELF CORRECT. SECOND ITS A FALLACY TO THINK THAT THIS IS BEING CAUSED BY SPECULATORS. THE REAL CUASE IS THAT OUR ECONOMY WAS BEING PROPED BY FISCAL SPENDING. WE SHOULD HAVE INVESTED MORE IN PRODUCTIVE SECTORS AND OPTIMIZED OUR INFRASTRUCTURAL INVESTMENT. HAD THE GOVERNMENT USED A LARGER PORTION OF THE BORROWED FUNDS IN REAL EMPLOYMENT CREATING VENTURES THAT SHOW SOME IMMEDIATE MEASURABLE RETURNS ON INVESTMENT. THIS IS WOULD HAVE ALSO PLACED OUR ECONOMY IN A POSITION WHERE IT WOULD HAVE BEEN A LITTLE MORE RESILIENT TO TO THE PRICE OF COPPER. WE HAVE PREACHED FOR THREE YEARS THAT GOVERNMENT NEEDS TO INCREASE ITS FOCUS ON AGRICULTURE, TOURISM AND SMALL SCALE MANUFACTURING. THIS SITUATION IS NOT BEING CAUSED BY SPECULATORS ITS A SYMPTOM OF LOW INVESTMENT IN GDP MATRIX…
We are broke people. Our kwacha can not buy a dollar. We are becoming zambabwe soon if nothing is done to correct things. $1 is 10pin 5. Guys
Who is the spoke person fr the country. ZNBC surely bring the relevant people on board.
Lol when did this journalist learn anything about economics and how the world works. Please reintroduce Forex control the IMF will come hard on you, you will lose the small gains you have made and you will be isolated financially that is even the Eurobond will be a dud bond….please go ahead and introduce controls….
This is the most crazy thing i ever heard in modern economics and there some dander heads who are even supporting Amos. Controls have been tried by a lot of regimes without any success, ask Zimbabwe & they will give you free lessons. The black market fraternity and Katondo boys must be celebrating in anticipation of getting rich again. Donors will pull the pluck and FDI will completely dry out. Try it & you will be very sorry.
Go ahead and introduce forex control and Zambia will be worse than Zimbabwe. And then you will leave government faster than you got in. Lungu is being misled by Mugabe. The entire Zambian cabinet has eyes but it cannot see. No wonder some people refer to this PF governmemt as a government made up of kaponyas.
Some of those who comment here lie a lot. In US there was “quantitative Easing” Do you know what this was? PRINTING MONEY. This was a measure used by the many in the West including UK to prop up their economies.
Of Course Zambia cannot print Kwacha, but it can limit the unnecessary demand for the dollar. This can be done by making imports expensive in the short term. So what Amos was saying is not foreign economics. It is something that is being done.
Today Farmers in Europe were demonstrating against falling prices of agricultural products, if this was in Zambia the petty politicians would have been screaming ECL has failed. But here is Europe you mean Anegela, David, and the like have failed?
It is amazing how JERKS can misinterpret economic policy. What are the interest rate in USA and UK? Corner stone of quantitative easing is a low interest rate for borrowing which encourage industries to expand. Just make comparison between lending rates in USA 3.25%, UK 3.75% and Zambia 22.5%. Does this difference says anything to you?
Sinazeze,
You got your facts totally screwed and allowing you get Scot free with them would be criminal. Here is an economical description of “Quantitative Easing” It is an unconventional monetary policy in which a Central Bank purchases Government securities & other securities from the market in order to lower interest rates and increase the money supply. Quantitative Easing increases the money supply by flooding Financial Institutions with Capital in an effort to promote increased lending and liquidity. Quantitative Easing is considered when short term interest rates are at or approaching zero and does not involve printing of new bank notes. American did not print new notes, but used this instrument to free up more money into the market.
Apa mwafakapula ba PF, how can you allow Amos Chanda to talk about such matters? Is Amos mandated or even qualified to talk about these complex matters for which he has no training at all? Where is Hon Chikwanda? Where is Denny Kalyalya? This kind of careless talk tends to send wrong signals into the market. My President, please correct this immediately.
As usual, I must clarify that HH is NO option.
The underfive is just a political opportunist celebrating the woes of the Zambian economy in the belief that it will give him a chance to get into his ultimate goal, State House, never mind the impact on Zambians, his gooals more important than the citizens that he aspires to rule.
But Dotti Fikoti warned you Zambians but you called him all sorts of names!
If I were still a Zambian, I would say enough! Time to kick out this chap is now, same way we did with Fonko fonko in 1991. Remember he had a few more years of his term of office.
Waiting for 2016 will be too late!
Time to give marching orders is NOW!
In my opinion, Neither the laissez-faire, nor the total forex exchange controls systems are suitable for Zambia. Some countries use well thought out systems which are a blend of the two.
My opinion is that imports of things readily available in zambia should be restricted,i,e, poultry,vegetables,fish,rice etc etc to save forex.:
Lungu has no real-world action plan on how to address the free falling Kwacha, the high cost of living, and other socio-economic anguishes hounding the country. Besides, he does not care as he is paranoid about winning the next general election.
Encourage export of services that attract forex such as in tourism.Improve the tourism sector and encourage the investors in it to charge in dollars which they should not extradite to offshore accounts as unfortunately few zambians are in tourism,
Please vote these clueless Cockr0aches out of office. They think running a nation is similar to running a Tavern in Chawama!!
Hahahaha Amos Chanda, do not be comical- there is no need to always use the term ‘speculators’.
He was referring to Chikwanda and Yamba
Fossil Chikwanda and the drunkard can’t face the media to say anything! They are ashamed because of what they have done! They are talking of things they know themselves are not true. 2016 is too far, this country will just ground to a halt! Let us just put a bullet in the drunkards head and save this country from total collapse! That’s the best way to save what has remained if any! 2016 is TOO FAR!
Fossil Chikwanda and the drunkard can’t face the media to say anything! They are ashamed because of what they have done! They are talking of things they know themselves are not true. 2016 is too far, this country will just ground to a halt! Let us just put a bullet in the drunkards head and save this country from total collapse! That’s the best way to save what has remained if any! 2016 is TOO FAR!!
Last time the kwacha fell USA was blamed and now it is over speculation by some market players. Look within and see what factors have contributed to the fall of the Kwacha please. Amos Chanda you are also becoming irritating. Are you the Spokesperson? A young person so dull and spineless!