Bank of Zambia
Bank of Zambia

The Bank of Zambia (BOZ)has maintained that the appreciation of the kwacha is due to measures that the central bank had employed rather than what critics are putting across.

Some media reports have suggested that the appreciation of the Kwacha against other major currencies is artificial and cannot be suntanned for a long period time.

ZANIS reports that BOZ Assistant Director, Balance of Payments and Debt Division, Economics Department Ivan Zyuulu told Journalists in Lusaka that during this period it is normal for the Kwacha to perform extremely well because this is the time that companies pay their taxes.

Mr. Zyuulu said it is also during this time that mines remit their taxes coupled with the increase of interest rates in the country.

He said the appreciation of the Kwacha is also as a result of the measures that the bank has put in place to address and control the situation.

Mr. Zyuulu said the central bank is currently monitoring the performance of all the bank’s departments in concerted efforts to stabilize the kwacha.

He said BOZ has a task to ensure that financial stability is maintained for a longer period of time in order to improve the economy.

Mr. Zyuulu said BOZ has put in place monitory policies in order to increase the interest rates because data is usually collected on the interest rate to see where adjustments can be applied.

He said BOZ has a task to ensure financial stability in the country and to ensure that all players in the economy have a levelled playing field

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67 COMMENTS

  1. FROM THE EXPLANATION GIVEN, THE APPRECIATION OF THE KWACHA IS SHORT TERM. WE WILL SOON BACK TO SQUARE ONE.

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    • Bloomberg 15/04/2016: Zambia’s kwacha has gone from the world’s third-worst performance in 2015 to the best this year, outshining gold, silver and 150 other other currencies and precious metals tracked by Bloomberg. Further gains are in store as copper prices recover, according to ETM Analytics.

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    • This must be the only country where people pray for misfortune, to achieve political mileage.They love to hear the country will face a fuel shortage and even predict the shortage on account of rumours of a contaminated feedstock consignment that Government has rejected. By estimating a replacement shipment they can already conclude a shortage will occur and quickly they announce the prediction.This is a country where a food shortage will be predicted with tremendous glee and anticipation because it will show how incompetent Government has been in failing to bring about the normal rainfall.And when in anticipation of the shortage Government announces measures to import maize, the opposition cried foul because it will be denied the opportunity to prove its prediction.Such is the nature of…

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    • Continued………Such is the nature of our politics.This would be funny if it was not so serious. Sadly some of our citizens peddle rumours to drive panic in the public in an effort to discredit Government and win popularity. Viva ECL

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    • To be fair, Lungu deserves 5 more years, you cant judge someone after 24 moths

      Thanks

      BB2014

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    • …what happens after companies have paid their taxes? Back to k11,000

      Things in Zambia are still very bad. After all tatulya dollar

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  2. Bloomberg 15/04/2016: Zambia’s kwacha has gone from the world’s third-worst performance in 2015 to the best this year, outshining gold, silver and 150 other other currencies and precious metals tracked by Bloomberg. Further gains are in store as copper prices recover, according to ETM Analytics.

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    • @ Ba Sebenza

      And what are the “measures” put in place by BoZ?
      Increase of base lending rate to 15.5% which has resulted in commercial banks charging 40% interest on secured loans which has been major factor in curbing industrial output!!!
      Therefore, projected 3 – 4% increase of GNP will not be met and as consequence Tax revenue will be lower and budget deficit bigger?
      The question I have is a simple one: Was there any other “measure” to curb inflationary trends instead of saddling ailing industry with non-sustainable interest rates?
      Government has not implemented any saving measures, instead has already increased its own pay-roll at the cost of everybody else!!!
      Great achievement!
      Please read WTO report before impulsive answering.
      Thanks

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    • Sebeza,
      For you PF plunderes, all is good with the kwacha doing well. For the poor Zambian struggling with high food prices tell us how this helps.

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    • @2Rep the composition of Zambias GDP can be divided into three by sector of origin: agriculture, industry and services. Under industry that you’ve attributed to the biggest contributors of industrial output are the mines and they don’t get affected by the local lending rates that you’ve mentioned cause their source of loans is from outside. We will achieve the projected GNP because under industry mines such as Mopani will invest over $1bn to inctease output. If you had talked about agriculture and lending rates I was going to agree with you…..but then again they’ll(farmers) significantly gain from exports of maize considering the fact that our Neighboring countries have been hit by drought due to EL Nino.

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    • @ Ba Sebenza

      Please no demagogic ranting. Just answer question if you can:
      Was there any other “measure” to curb inflationary trends instead of saddling ailing industry with non-sustainable interest rates???

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    • @Ba Sebenza! The kwacha is the “best performing” becoz it had fallen the furthest! ECL found kwacha at K5 to $1. It fell to K14 to $1, then improved to K11.45 to $1. It is now at K9 to $1. Great improvement from K14 to K9, but it still has lost value from its base rate of K5 to $1!!! It is someone boasting who first destroyed your house but has managed to rebuild only the kitchen!

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    • If I get 17% in an exam then get 35% after repeating that is a very big gain but it is still an F!!!

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  3. Shouldn’t we just be happy the kwacha has gained? normal people not wanting to capitalise on the suffering of people will thank God we hope it stays the same or get better than this.

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    • @ me

      And what are the benefits for “normal people” which can be attributed directly to the Kwacha appreciation? NOTHING!!!
      Have the shelf prices followed Dollar trend? NO.
      Please explain how “normal people” have benefited?
      Thanks

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    • @2REP:

      Where in the world do shelf prices SIMULTANEOUSLY track the “floating” value of the currency? I am no economist, but I think what you are saying here is patently false!

      There is always a LAG between the currency gaining (which can happen several times a day, let alone a week or month) and the trickle down effects of that on shelf prices at the Local Supermarket. Such currency fluctuations usually have IMMEDIATE effects on lending rates between BANKS and/or other Financial Institutions—AND NOT WHAT YOU PAY AT THE STORE!

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    • continue…

      Of course when the Kwacha firms up around a certain STABLE RANGE, you are certainly going to see prices at the store start to fall also. In fact, it is always true that prices tend to go up faster when the value of the currency falls then they go down when it gains. This seems to be an accepted phenomenon in economics. In fact, this scenario is playing out even here in the US. The dollar having lost a bit of value over the past weeks, a gallon of Milk at Supermarket has NOT gone up even a dollar/cent over the same period—that’s the LAG I am talking about. Nonetheless, if the situation persists then YES, shelf prices may start to climb. This is similar to what is going on even Zambia—although opposite situation.

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    • Oops! Suppose to say: “…when the value of the currency falls [THAN THEY] go down when it gains…”

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    • @ Yambayamba

      Short memory or sucking as usual

      When Kwacha was at almost 15 to USD there was last increase. That was 4 MONTHS ago.
      The only positive (LOL) result that now one bag of Mealie Meal cost almost 9 dollars instead of 6.
      Next you are going to say that we are eating imported maize? Great improvement?

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  4. ………Ivan Zyuulu told Journalists in Lusaka that during this period it is normal for the Kwacha to perform extremely well because this is the time that companies pay their taxes……. If this statement is anything to go by then its true that the appreciation of the Kwacha has nothing to do with this Chipante-pante government. Meanwhile Viva HH

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    • You are the selfsame people who turn everything into petty partisan politics why is it difficult for you to simply post without the political slogans. I hate cadres with a passion!!

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  5. What real people are saying is an economy is a serious issue that should be left to economic fundamentals. Distortion or misinformation whether negative or positive just hurts it. Give out the truth so that players react correctly. Zyuulu (a southerner I presume) says this is the time people pay taxes (in dollars I guess) so where is Jameson’s austerity measures?

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    • When people were borrowing cheap kwacha to wipe out the dollar from the market hence give it an artificial depreciation was that letting economic fundamentals to influence the economic. Its strange that when something good is happening to our currency some people are angry because their fortunes of taking up the leadership of the country are dwindling. Even if its for a day a troubled family experiences peace it should be cherished and everyone works hard to sustain it instead of beginning to question how peace has come to the family whether its artificial or genuine peace.

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  6. So once companies and individuals pay their taxes then its back to normal unless of course the price of copper picks up…the first part of his explaination is clear but why is it when he alludes to the so called measures they have put in place everything becomes vague.This is why i like science and engineering …you can explain to a layman that 1 + 1 = 2 OR we gave the patient this medicine that is helping with this.You dont have to beat about the bush like some sly banker to confuse them.

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    • Fool1sh Boy Jay Jay we live in an economic and social world, you just have to be intelligent enough to figure out and understand. you will remaining a poppa complaining on social media everyday.
      Get a life!

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  7. It’s not good opposing everything, let’s be happy not just politicizing everything. Shame !!

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    • You are the selfsame docile husband who is overjoyed when his beautiful wife who is unemployed comes home with whole monthly food shopping, new clothes ie lingerie, shoes etc and tells him that the money was from winning the lottery..she has lost the ticket.
      The more you know, the more you see and the more you hurt. This is why utterly ignorant people like YOURSELF are always HAPPY.

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  8. Any improvement in the Kwacha by any means is good. Again, it must be pointed out to the screaming schemers that have lost all sense of proportion in their hope that a crashed Zambia will usher them I to power,….we are in a world fuelled depression. Other countries are fairing far worse than we are! Nigeria shoring its currency by Chinese big loans, Puerto Rico hanging out for a bail out with a crushing $70 Billion debt……..meanwhile in the UK, Lending to Big Business is limited (bonds encouraged) and consumer loans including mortgages are encouraged with more banks making loans available to ordinary citizens.

    Zambians must give the discouraging nay Sayers a boot and become patriotic enough to walk it with their gov’t. STOP BEING NEGATIVE, because negativity produces…

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  9. Change the title please. The explanation confirms what people have been saying “artificial gain”. And also allow the economist reporters of LT to write such articles than jumping to impress your dark corner brown envelope issuers.

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  10. I can’t see where the problem is. The man just gave an explanation to the kwacha gain. Please please give people chance to work….imwe bakachema….

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  11. I thought a statement from the BOZ would dispel the assertion that the sudden upward move of the Kwacha is artificial, but no, it has just increased our fear and uncertainty. It sounds like a statement you would get if you asked any lay man on a street corner or pub what they think about the kwacha. So now it’s drifting around the explanation they usually give about loading shedding, low rainfall and shallow kariba. The tax period is here so smile the kwacha will appreciate. He skirted and farted around the actual measures they have put in place that’s driving the kwacha up. The statement that this is fake growth is still valid. The truth is that they have pumped our precious reserves into the system. Lets see the statement of account of the reserves.

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  12. NEXT ITEM MEALIE MEAL PRICES WILL BE REDUCED …watch this space abena Zambia..PF has been working, is working and will continue to work for the people of Zambia..even the ones that complain have benefited from PF’s policies..the Farmer Input Support Programme is helping all of Zambians whether you are pro PF or UPND ..

    More good things to follow abena Zambia..CBU and UNZA I predict will be reopened soon and students don’t worry I am hopeful especially since ECL himself a former monk, the govt will give back the students their meal allowances.

    2016 ECL nafuti

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  13. so mopping up excess kwacha and whatever has caused the dollar to weaken is all cadabradabra? when did economics become an abstract science? even as a layman i would find it hard to believe a woman can conceive without a womb. may be by divine power? why not if we’re a christian nation? it’s just disapointing that some economists(nkhoma) are seemingly failing to identify their rightful positions in this conundrum

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    • There is simply lack of professionalism in Zambia if you are working for these govt institutions…its deceitful, shameful and UTTERLY disgraceful….even a Currency Trader on the trading floor in New York will give you concise and clear explanation of Kwacha’s gain by simply looking at screens and he doesn’t even know where Zambia is located in Africa.
      MEANWHILE In Zambia we have these so called professionals at BOZ being paid thousands of dollars a year, trained by taxpayers to Masters Level abroad and they can not give you a clear explanation…its best you don’t comment…if you have any pride in your profession.

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  14. …the reason advanced is very flimsy…Kwacha was dropping like a fresh leaf last year same period…does he mean to say companies did not pay taxes last year…??…Kambwili was on TV justifying the fall as a global hitch….he compared the Yen, Rand, Pula which had also dropped….the opposite scenario is happening this time…the Rand, Yen have also gained….is it as a result of BoZ measures..??…rubbish

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  15. consolidating your hard earned appreciation of the kwacha Its not easy to have the momentum to achieve THE APPRECIATION GIVEN THE DUMPENED CONFIDENCE THE KWACHA WENT THROUGH

    The appreciation of such basis points cannot simply be attributed to what Mr ZYUULU has said GIVEN THE DUMPENED COMFINDENCE recently ITS REAL AND A REFLECTION OF CONFIDENCE IN CURRENCY PACKS

    Lets also revise and use appropriate forecasting methods BOZ and stop using Standard Log normal or normal models in managing your gains in these term structures implied in the gain of the kwacha as regulatory risk management CHANGE

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  16. I think it’s possible to nit pick too much. The fact is Markets are on the up as far as copper is concerned. If markets are on the up, the Kwacha is benefiting. The rest is just addition to the explanation.

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    • You are simply contradicting yourself…how can it be an addition to the explanation when domestic measures they have put in place haven’t stimulated any growth in the past.

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  17. Ivan Zyuulu you are an utter disgrace … on Monday morning when you pass through your door and look at sign saying “Assistant Director, Balance of Payments and Debt Division, Economics Department” ask yourself honest questions about yourself and your profession.

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    • Just say you want his job you bitter !diot. People like you are good at talking but poor performers in the work place and life in general. Your jealousy will take you no higher than your short d!ck can go.

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    • They are still in ”disequilibrium stage” the forces of supply and demand (competition) will eventually place them in an new equilibrium taking account of the new exchange rates and other factors to arrive at equilibrium prices which will be lower than the current prices. However certain commodities are controlled by the govt like oil, hence the real price will be felt when GRZ reduces the prices downwards through ERB. are generally price reduction is accompanied by ”Stick” effect, seasoned economists are more comfortable with stable prices than reductions.

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  18. When you look at the shadow mirror in rates for the kwacha ,you will see “‘ inverse-call transformation”‘ in rates implied by the kwacha correlating check and see the CONFIDENCE in markets

    If you forecast like others using normal and lognormal models you will not get the forecast correctly There is reduced volatility implied in the term structure of the kwacha rates See and compare your intuition using normal and log normal models and see how good forecasting by “” inverse-call transformation “‘ you will see a correct good reflection of the gains of the kwacha against the packs That is why bloom was able to state correctly but in a negative…

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  19. in a negative connotation the gains of the kwacha It’s about the CONFIDENCE in the market for the kwacha nothing more than that to what has been in the inflows and outflows otherwise it could not have moved those points much The kwacha is simply exhibiting good qualities of a currency as a measure of confidence

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  20. My fellow bloggers be reminded that no amount of analysis will change this marvellous achievemenent worlds performing currency 2016. Be assured that even obama is googling to check where zambia is. Kudos to patriotic leadership. Please learn to give credit where its due

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  21. PLEASE get your words right!! What is “Some media reports have suggested that the appreciation of the Kwacha against other major currencies is artificial and cannot be suntanned for a long period time.”?

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  22. BINGLE!!! KUDOS TO @if not why not… YOU JUST HIT THAT NEIL IN THE SKULL….No matter how round and round everyone goes about it…its gonna come back to the same thing…. which is- MARVELLOUS ACHIEVEMENT.

    IFINTU NI LUNGU….EDGAR ALL THE WAY!!

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  23. I like science. It’s very straightforward. In case of chikwakwa you have to grope in the darkness in search of answers. One will tell you this, the other one will tell you that. What a nonsensical discipline.

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  24. There is no chikwakwa here as you can see All well researched and confirmed crystallise to the same Fake Analysis is what grope in darkness and their is no fundamental basis

    There is no chikwakwa in all disciplines only if you commit to it I like this

    lambda=(2*theta)/(sigma^2); eta=1/lambda; %inverse call parameter

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  25. God does more than we can expect , Lungu cried to God for this nation so Our God has answered the prayers , but don’t stop praying .
    God gave us enough rain for the harvest , when our neighbours had nil , indeed we have been favoured why because of our humble president . When we prayed the devil laghed, now he wants to find excuses for the success .
    Let Zambia remain a nation where Jesus reigns , glory to God

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  26. Is there anything under the sun that UPND will not debate? I thought that intelligent people remain focussed and do not let emotions cloud their existence. Just look at HH, he will say anything anytime and then find that he was actually shooting himself in the foot. Look at their Vice President and running mate GBM, farting and insulting all over and he calls himself a leader. Most surprising is that he calls himself a member of the Bemba royal establishment, is that how lowly he thinks of his Bemba vintage?
    No wonder Mmembe has no regard for HH, in today’s editorial of the Post Mmmembe warns people against voting for people simply because they can shout “Zambia Forward” loudly. He asks voters to ask them Zambia Forward to where as the HH characters do not seem to have a direction or…

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  27. No wonder Mmembe has no regard for HH, in today’s editorial of the Post Mmmembe warns people against voting for people simply because they can shout “Zambia Forward” loudly. He asks voters to ask them Zambia Forward to where as the HH characters do not seem to have a direction or vision. All they know is to say the opposite of everything that Lungu says or does.
    If he says produce more maize, HH simply says don’t produce. Easy to be an opposition in zambia!

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  28. According to Mmembes editorial and his opinion of HH in recent days, mr HH is simply not a viable alternative to Edgar Lungu’s PF. In fact he categorically states that HH will be worse than anybody else before him if he ascended to power. He says that HH has neither vision nor ideology, but rather mistakes going to state house as his vision, I.e for his own good and wealth, not for The majority poor Zambians. Don’t ask me, ask Mmembe. And tell GBM not to insult me but insult Mmembe who said thise words, I am simply quoting Mmembe and you can read for yourselves in the the Post of recent days and weeks.

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  29. Zambia and some Zambians.. Problem is we have more pessimists than optimists. In short, we are our own economy’s enemy so I wonder who,if not us, will help develop our economy

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  30. LT what is the meaning of, ‘Some media have suggested that the appreciation of the Kwacah against other currencies is artificial and cannot be suntanned for a long time.’ It is, “and cannot be sustained …..” Do you have spellcheck of proof readers?

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  31. In whose interest does he want to increase the interest rates; or maybe its a typo by LT as usual.

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  32. What are y’all screamin about,let the kwacha come down to k5 and all you guys with money to burn can import beautiful things for peanuts but watch out interest rates and liquidity will be tight and some businesses may go bust.

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