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

The Bank of Zambia has maintained its monetary policy rate unchanged at 15.5 percent.

Governor Denny Kalyalya also revealed that the economy grew at only 3.6 percent in 2015 against a target of 7 percent.

Dr Kalyalya said the country’s gross domestic product is expected to slightly increase to 3.7 percent this year.

He said during a quarterly news briefing that growth of around 3.6 percent is way too low.

Dr Kalyalya said one of the reasons why the Central Bank has left the policy rate unchanged is to address the volatility in the exchange rate.

He said the Bank of Zambia expected the economy to recover to around 6.5 percent in the medium term, while inflation would ease to between 10 percent and 15 percent by the end of this year.

Below is Dr Kalyalya’ s statement in full.

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68 COMMENTS

  1. As the first blogger to comment,i now wish to invite and call upon PF Vuvuzelas to make their comments……..zeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee

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    • Katondo boys, Patriot abroad,UFO,HH Techilema, MMD bootlicker……..the floor is open ba fi ka la

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    • It was reported yesterday that Govt was not broke, but the current account deficit from surplus to deficit a huge swing and is extremely worrisome, and that any positive figures were a result of the borrowed monies . We are in trouble as a nation, no two ways.

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    • The floor is open indeed….half full or half empty Mr Mubita Mukwalikuli Musonda….depending on how you look at a glass of water.. so you being a naysayer or rather a UPND, of course the glass is half empty but as Patriotic Zambians we still remain hopeful and Lungu will be given 50%+1 votes in August by the good and smart people of Zambia

      2016 vote (PF )Edgar

      I thank you very much

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    • This is a clear indication that there’s no need to change govt…..let PF finish all its programs initiated by late MCS….we are moving in the right direction no doubt about that

      2016 vote (PF) Edgar

      I thank you very much for your understanding

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    • Mr Kalyalya has admitted the obvious that PF has decimated the Zambian economy completely.Just look at the following data below.

      A person who earned K5,000(rebased) in 2011, earned an amount equivalent to £800, which was also equivalent to R10,400(SA Rands)

      Currently, the same person who earns K5000 to today earns equivalent to only £333.33 and in SA rands its R7,666.59. Pay had decreased massively the PF administration.

      From this simple analysis it’s clear that the global downturn has contributed very little to the depreciation of the Kwacha. The PF ‘s economic mismanagement has contributed a great deal to the downfall of our Kwacha and the economy generally.

      The Kwacha has therefore depreciated by 320% in the same period SA Rand depreciated by 177%. So it naive if not…

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    • Also Mr Mubita Mukwalikuli Musonda please find time to read other countries news check out The Herald(Zimbabwe), Mmegi(Botswana), Daily Nation(Kenya), Nyasa Times(Malawi ),The Citizen(RSA)and if you can read Swahili check out Mwanunchi (Tanzania )…that way you can have an idea of what’s going on in other countries too…stop blaming our beloved Lungu and PF

      2016 vote (PF)Edgar

      I thank you

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    • The Kwacha has therefore depreciated by 320% in the same period SA Rand depreciated by 177%. So it naive if not stupid to suggest that the PF has nothing to do with the downfall of the Zambian economy.

      From this simple analysis it’s clear that the global downturn has contributed very little to the depreciation of the Kwacha. Its the PF ‘s economic mismanagement that has contributed a great deal to the downfall of our Kwacha and the economy generally.

      PF kuyabele in 2016 lest Zambia becomes worse than Zimbabwe.

      VIVA UPND and the UPND team.

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    • me I don’t talk politics with kids, that’s why me and my friend @Nostradamus drink tequila not for children,,,,,“ the economy has shrunk“ ,,, the immediate reason would be how can a weak kwacha buy top of the range wine and brandy??? ,, please people be wise chakolwas!!! not these chakolwas of today who forget their children and marriage when they drink wine,,, the day you will drink tequila you will forget yourselves!!!!!!!!!!!!

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    • An economy growing at only 3.6 percent , in a poverty stricken country? This is a disaster.
      Honestly, there`s something wrong with Zambia, even when people are fully aware that their clueless leaders are driving there future and that of their children in a ditch, they still vote for the same leaders. With smart leaders, can attain meaningful development within five years. Its unfortunate how Zambians willfully choose poverty over progress. Sad indeed!

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    • We should never reward failure. PF have failed to run the economy. If they are given more time, it will be more time to ruin the economy further, the Zimbabwe way. Zambia should have booted out UNIP soon after 1972 when the first signs of failure appeared. Never reward failure. Never again.
      #ChagwaMustFall

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  2. I would say that every one on the ground can clearly feel the impact. As ED was there last February, I would like to be a fly on the wall when he sits alone and contemplates the last twelve months. He must at some level know his hands needed to be steady to keep his ship from hitting the ice berg. Do your hands feel a little shaky there, ED?

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    • A Phiri ana bwera

      The ship hitting the iceberg? which ship….please tell you not talking about the mighty Captain EL and vessel PF

      Captain EL: “Requestdockingcoordinates”

      Pope Francis: “recalldockinginstructions”

      2016 vote (PF)Edgar

      i thank you

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    • @ katondo 1mbeciles

      Your D1CKING station has run out of fuel (loans) and is drifting in the space by the force of ever diminishing inertia. And then what? Burning and exploding on the entry in to reality atmosphere?
      Indeed, D1CKING station populated not by Tom or Harry but just by D1CK HEADS

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    • Lungu has failed to provide leadership to Zambia. He has continued with the same mad economic mismanagement of Sata. Lungu should have fired Chikwanda but he did not. Now we are all worse for his incompetence. Being in a bad neighbourhood is no excuse. Only a PFool will comfort himself that it is okay to starve because the neighbours are also starving. Is this a Bemba way of thinking? Pretty weird!
      #ChagwaMustFall

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  3. We need to do more Dr Kalyalya, mobilize resources and inspire all Zambians to work and work and work. Our economy is small but if strategies are implemented with the force needed Zambia might develop within a decade.

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    • I suspect your are a UNZA graduate. Unfortunately, this institution has contributed very little to Zambia’s development. It’s the best University at Riots and Closures and producing clueless politicians. Only those that have been to UNZA and then gone on to study with other institutions have a different understanding and perception of the use and meaning of higher education. We need progressive institutions. All that is left at UNZA is no allowances perpetuated by the products of the same institution. To be honest, UNZA is the only university in the world where the university is closed because students have rioted over allowances.

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  4. This does not even look as bad as (HH) tries to mislead people. The satamic minion is just a coward cow leading UPND followers into a ditch. PF has done well amidst economic turmoil.

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    • You don’t need HH to tell you what s good or g with our economy. It was reported yesterday that Govt was not broke, but the current account deficit from surplus to deficit is a huge swing and is extremely worrisome, and that any positive figures were a result of the borrowed monies . We are in trouble as a nation, no two ways

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    • @kudos

      Stop playing politics with Zambian people’s destiny!

      Today there is tangible, palpable and excruciating poverty especially in towns. Unless you are in the league of Sardanis, Chama, Chikwanda and EC Lungu your ability to live comfortably as before has been decimated!

      My question is whether despite the suffering brought by Lungu PF, the suffering voters will Zimbabwe style be intimated enough to vote for misery extension?!

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    • @ kudos, thank you for your comments.

      Every time you post you manage to include HH.

      You have done very well helping him get elected, and I want to thank you for promoting him so widely.

      Keep up the good work!

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  5. LOL VERY FUNNY YES! THE REAL SITUATION IS A LOT WORSE THAN BOZ WOULD CARE TO ADMIT. THIS REPORT THOUGH GRIM IS SUGAR COATED. ACCORDING TO STASTICAL ANALYSIS AND EMPIRICAL EVIDENCE OUR ECONOMY ACTUALLY SLOWED TO NEGATIVE GROWTH IN THE LAST TWO QUATERS. WE ARE ACTUALLY IN WORSE TROUBLE THAN BOZ OR LUNGU WOULD CARE TO ADMIT. NO ONE EVEN PAYS ATTENTION TO THIE POLICY RATE. NO LENDER EXCEPT BOZ USES IT AND BOZ RIGHT NOW CAN NOT EVEN BE LENDER OF LAST RESORT. FINANCIAL INSTITUTIONS ARE HAVING TO SOURCE FUNDS OUTSIDE THE COUNTRY. ATI POLICY RATE WHAT POLICY ON PAPER? TIYENI UKO!!!!

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  6. Democratic competition is so fierce, head to head, that losers like HH and the cartel have resorted to bad journalism, supported by dubious blogs like the Zambian watch Dog. Reuters a credible newsagent reported two days ago that Angola the second largest producer of OIL in Africa has suffered currency devaluation and a 40% contraction of revenue. This has nothing to with corruption or bad economic management but the unforgiving global economic climate. I have lost faith in HH because he has entered a proxy war where he is fighting on the side of the cartel. He is defending the interests of the cartel so he will do what they tell him to do.

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    • @Captain Sankara

      If Kwacha had depreciated by 40% Zambians would not be in such misery today.

      Unfortunately Kwacha has depreciated almost 400% thats 10 times worse than Angolas ‘s depreciation. Angola yes the Global trend is responsible. But for Zambia much of the depreciation is due to PF ‘s reckless.

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    • Th question is, Is Angola in the same mess as Zambia? Yes revenue can go down but what measures has the country put in place to absorb such shocks. We had a healthy surplus and foreign reserves, but as soon as PF came in, everything was turned upside down due to reckless borrowing and lack of planning. Botswana discovered and started mining diamonds in the 70s. They built their reserves for 20 years before they started infrastructure developments. In 50 years of copper mining, Zambia has only 2 million dollars in reserve, it’s a shame.

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  7. Work on Confidence Confidence is lacking in the whole transmission mechanism

    Everyone know that those MPC policy decions in rates have influence credit, stock and bond rates ,consumer and business confidence as short in the appetite to spend affecting inflation and growth appropriately

    The confidence and trans, mission mechanism is often longer in most cases more than 6 months to 12 months to yield positively the desired RATES

    You will need to see the reactions for those in NEGATIVE interest rates in similar GLOBAL exposure and see the level f confidence and effectiveness of the transmission mechanism

    Good Decisions though Work on Confidence to effect…

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  8. HH is now vindicated and this is what he has been saying along. Chishimba Kambwili had always been a critic of HH trying to urge with the econmist/chartered accountant.

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  9. Kenya’s economy which is non commodity based like Zambia’s is growing at 6%+ while our mineral endowed Zambia is limping wounded at 3.6%.

    Kenya clearly shows the benefits of diversification and the smartness of Kenya’s policy makers compared to our dull Zambian bureaucrats and thieving political class.

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  10. So deduct was 7% but due to shambolic myopic policies of Lazy bum Lungu the economy grew by a pantry 3.6%…this is a LAMENTABLE FAIL…no sugar glossing it even a grade 7 pupil can not go anywhere with such appalling performance. Lets learn to benchmark and using KPIs…weeding out the lazy and weak to progress.

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  11. ok lets all get our bums off the couch and go out their and develop Zambia,,,,just commenting on LT 24/7 wont solve any problems…..If you are Patriotic enough then you need to be right here in Zambia and help Lungu and the rest of the beautiful people of Zambia……

    Enjoy the rest of the weekend and i love you all my fellow countrymen wherever you are,,,,,,

    2016 the Pope said vote for EDGAR LUNGU

    i thank you

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    • Who is the pope to you…where was he when your ancestors were being sold as slaves? Your pope was profiting from the whole scheme…wake up and study about self!!

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  12. It is always amazing to see how some people who claim to intellectually doze themselves with unreasoning argument. Around the World economies have been constricting especially those that depend on oil or farming, this include middle east , Russia , Brazil and South Africa etc. It is very unrealistic to portray Zambian economy that it is worse. The problem of the Zambian economies goes back as 1991 – when MMD and HH mismanagement the Zambian wealthy. The grand corruption that occurred was unsustainable for any country to progress . What Zambia , need is dictator who will compel corruptible individuals to accountable for the misery have caused to the Zambian people. Mr. HH , is accused been the beneficiary of corruption – if HH was in the USA , a serious “COMMISSION of INQUIRY…

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    • @Clinton

      The Lord God curse you and your generations for.outright lies to deceive young.Zambians and the uneducated ones who don’t know what happened during privatisation led by Ronald Penza and Chiluba. The mines were privatised under the leadership of Francis Kaunda and ZPA .

      You lie with malice afterthought. HH never privatised any mine.

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    • @ sandier clinton

      I fully agree with you about “Commission of Inquiry in to destruction of Zambian Economy by PF”. After all, facts are there in the open.
      Shall we start petition to submit to Chief Justice?

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  13. @clinton! We are tired of that outdated rhetoric of HH sold what! Bring up something worth listening to. Please cadres and PF kaponyas we don’t need your comments here!

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    • The vindictive and malicious corrupt dictator, Sata, spent his remaining years in State House trying to frame HH. He only managed to come up with bank statements. Let PF come up with the evidence so that they can take HH to court. We know how PF have stolen the Eurobonds and they will pay for that.
      #ChagwaMustFall

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  14. To the bank governor, in your quarterly report you have not mentioned the effect of your printing more money and putting it in circulation – the notes containing the brell(spelling) for the blind!
    How much was it in total that you printed and put in circulation and don’t you think it too had a contribution to the fall in the strength of our currency and also the rise in the inflation rate?
    Mind you, inflation is the separation between the rich and the poor!
    7% to 21% shows the gap that has been created and Ba governor the ball is in your courts, how are going to narrow this gap?

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  15. @clinton! We are tired of that outdated rhetoric of HH sold what! Bring up something worth listening to. Please cadres and PF kaponyas we don’t need your comments here!!

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    • @Kaputo Davies

      This lying.Clinton character is dangerous as his attempt to demonize HH may lead to the youths believing something that never happened during privatisation.

      Those who are old enough know.how Chiluba and his cronies mismanaged the mines privatisation using ex ZCCM CEO Francis Kaunda. They rejected the Kafue consortium and went for a shambolic one mine option which has led to current mine challenges by breaking economies of scale.

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  16. Read carefully, Clinton is saying HH never privatised mines whic I agree with him, so why attack him? Zambian reading culture as usual.

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    • Read between the lines and infer from Sata/PF obsessions about HH’s wealth. What has privatisation got to do with a 2016 BoZ quarterly report? We get it that there was no privatisation in 1991 when MMD had just beaten UNIP at the polls. PF will stretch and distort history.
      #ChagwaMustFall

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  17. Apart from the statistics provided by Dr Kalyalya what is new about the contraction of the Zambian economy that we did not know? Hasnt the pf government been explaining about the impact of low copper prices on the economy? Are you deaf you guys in Upnd or do you live on another planet? This propensity by Upnd to celebrate anything that causes suffering to our people instead of being sympathetic will cost them the votes which they want. There is no sane Zambian today who does not know his economic status. There is no sane Zambian who can blame Edgar Lungu for that. If you continue on that silly path Upnd prepare for decimation on 11 August. Pity underfive, nothing works for him in politics.

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    • I am sane, I am not UPND, I am over 60, I am still working and giving employment to others and I do blame PF and NO BODY ELSE.
      Now “wise head” (LOL) you want me to be “sympathetic” to PF when I am going to close my business which is employing 328 fellow Zambians because of mismanagement induced by personal greed of PF leadership?
      Please stop insulting. Enjoy licking the crumbs under high table until August, that is your choice, but do not insult us no more.

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  18. Not bad for us inspite of world finance under pressure. At least better, s.a is worse. In s.a there jobs are been lost like thousands. We are better otho can do better. Tuletasha.

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  19. Confidence is important in the rates decision for it to have any effect, You see the Investing Community and others affected by the Rate decision they must be in what BOZ is selling through the MPC That is why the transmission mechanism must be correct to effect appropriately the decisions of the MTC or FOMC as it where
    The case of Japan in monetary policy since time memorial has always been a classic scenario
    If you follow the decisions from Janet to China to ECB and Japan You will see the effectual transmission mechanism effecting change in buying and selling of assets to effect desired positions and quantity theory of money thereby affecting that…

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  20. inflationary rate HEALTHY FOR BUSINESS
    For instance there was an era of QE in Japan ,with investing communities sentiments super, but markets became ever higher. Before it was considered to hold interest rates in Japan below Zero but sentiments was lovely to investing communities but however since then ,this negative interest rates stimulus by Japanese Policy committees have lost their stimulus and no longer gives confidence in the economy to Investing Communities
    You can see this from the Nikkei Stock Index that has fallen by 11% following the policy pronouncements, resulting in investors finding comfort in the yen The yields in the 10 yr. JP bonds have also…

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  21. fallen into negative positions as a result of bank of japan lowering its interest rates into negative

    This rate decision and transmission mechanism and confidence is what seems to be slow in the Zambian context You will need to see the reactions of the key indexes when you track on the markets and see when they response and by how much they have done for each rate stimulus or cover that has been made
    For instance look at the Luse All share Index % change in accordance to the rate decision look at the Interest rate and see the fixed incomes category we have See how the response has been at each rate decision and 2 to 3 months after
    You will…

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  22. agree that the decisions are correct and great but the TRANSMISSIOM mechanism seems to be faulty working and therefore confidence is the issue in the RATES implementation in Zambia

    The complexity theory and the new thinking in monetary financial friction should also hold true in the global sense in the rates decisions on capital accounts and current accounts ////

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  23. Please observe also that the Bank of England has maintained its decision to maintain low rates despite a build-up in inflationary pressures its likely to delay policy tightening until in 2019 looking at the global forecast and the levels of indebtness in china and slump in activity in US gives risks to markets to 2019 and beyond
    The need to increase rates further waned with cut forecasts in growth, inflation and employment statistics “wages
    In short you need to see the market expectations implied in negative yields both sovereign and other Bonds and see the bigger picture to the rates decisions in Zambia There is an element of Global deflation
    You will need to see…

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  24. You will need to see and understand what is causing the global deflation and see various operational twists in the dollar and its low time devaluation since 2011,a forty year period on the basis that 0% rates =0% risk
    All in all there has been 600 global cut rates in an effort to stimulate but that has only perpetuated deflation with the stronger US dollar, slump in commodity prices and higher cost of capital and sovereign spreads in bonds
    So if you were to buy equities anywhere global ,you must consider but in the case of Zambia’s rate decision what is the decision ……….????

    Equities have fallen along with commodities as a result and rate decisions…

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  25. to effect positions have often been made to reflect the rout especially as you can see from futures equities and commodities, with the highest fall being in Greece and China respectively

    We need also therefore be cautious not to call commodity deflation as transitory but rather take a view of markets and rates on the long term especially as we parry with global markets China and US in particular ////////

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  26. Reading through the statements and the slides, Emphasis on Policy Rate alone is not enough to financial stability objectives There other MACROPRUDENTIAL TOOLS for the entire financial system not just an individual financial system That is the point If you use MACROPRODENTIAL tools ,you develop a Financial system that is resilient and on an ongoing basis stronger and more manageable from equities to derivatives to alternatives and fixed incomes
    The crossovers between monetary policy and macro prudential policies is significant though You can use macro prudential tools to regulate the financial cycles and loops between asset prices and credit growth BUT use MACRO…

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  27. PRODENTIAL TOOLS FOR THE ENTIRE FINANCIAL SYSTEM STABILITY NOT JUST ONE MONETARY TOOL IF THE ECONOMY IS TO BE RECILIENT AND ONGOING BASIS STRONGER WETHER IN INFLATIONARY OR DEFLATIONARY PERIODS WITH GLOBAL EXPOSURE O THOSE MARKETS AT THE CORE

    MACRO PRUDENTIAL POLICIES FOR ENTIRE FINANCIAL SYSTEM STABILITY IN BALANCE TO RATES SHOULD BE THE KEY I END HERE//

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  28. The BOZ Governor is Good and well thought, though and his thinking in the right direction but emphasis should not just be on Monetary or Rates with a boot strapping type of increase of rates
    It’s clearly known that monetary policy cannot be a primary tool for financial stability You will need also other marco prudential tools to create a resilient Zambian financial system
    Prudential macro policy tools will help to address increasing exposure to vulnerabilities The aggressiveness of BOZ to go back to sustainable inflation targets in view of other economic head winds ,is tricky without a whole application of macro prudential tools in the world of Financial frictions…

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  29. where the Zambian economy will be on constant attack because the downside risks to inflation and our economy is mountainous We are more prone to tightening policy more aggressively as opposed to quick loosening when the economy returns to potential and the mode for creating financial system risks is quiet high

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  30. If you see policy in emerging markets since 2011,Emerging markets and ldf have generally tightening but the uncertainty in the global and detoriation have caused a reversals but the transmission mechanism must be effective in this case ,the Zambian scenario with 300 basis points rates change from 12.5% to 15.5% since 2011 to 2016 should be resounding
    For example the FEDS is projected to hike additional jabs of 4 rate hikes in 2016 as a result the US dollar is to remain stronger against the yen and euro because the transmission mechanism of the FEDS tighter policy to other countries is in two channels ,through the bond markets because of the global bench…

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  31. mark role of US bonds and treasuries and Secondly through the PETRO DOLLAR or simply the USD

    Exchange rates have been the main transmission mechanism in the FEDS gradual tightening also higher yields resulting have helped to attract capital inflows to America marking the USD value higher and sterling inflation making other countries’ currencies venerable negatively affecting their positions
    We need to see similar transmission mech on all macro prudential key indicators in those assets being influenced in capital flows favourably in the decision for rate hikes

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  32. Time lag and results in 12.5% last hike to 15.5% and same and further in 2016 of essence to see the effectiveness of the POLICY RATES decisions
    Check the slides presented Look at them critically and see the operational twist for each rates hikes

    Closed wont respond napyamo///

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  33. Hang them high, of course you are UPND,. Your business, if at all you have any, would have suffered the same fate, or much worse if it was under HH. I don’t think that HH could have withstood the pressure of being faced with such a huge challenge within a few months of being elected into office, he would have cried. To me Lungu is the man for he has demonstrated nerves of steel, a quality I want in my President. not these toy leaders!

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