BANK of Zambia (BoZ) says Britain’s exit from the European Union (EU) will not have an immediate impact on the local financial markets because the country’s major trading partners are South Africa and China.
Speaking in a joint interview at the just ended 52nd Zambia International Trade Fair in Ndola, financial markets director Emmanuel Pamu and director economics Francis Chipimo said while the Brexit situation creates uncertainty in the Euro zone and the global economy, Zambia will not be affected in the short term as that country is not its major trading partner.
“The uncertainty will impact all other economies. But for us, we have our own domestic country-specific factors, which are impacting on the exchange rate. These are the ones which are more dominant at the moment than external factors.
“Obviously, it has an impact, but what is more dominant are the domestic factors, which are pulling the exchange rate in the appreciating direction,” Dr Pamu said.
Dr Pamu said when news that Britain had exited the EU was announced, currencies of some economies in Africa depreciated, citing the South African rand as one of the currencies that had depreciated, but the Kwacha appreciated and is still trading on an upward trend.
However, Dr Chipimo said it is too early to determine the implications of the Brexit, saying that it will be dependent on how the negotiations will go with the UK.
“This will also depend on what that would mean in areas of trade and investment for both the EU and Zambia, but right now our major trading partner is not UK, but South Africa and China,” he said.
He said there has been some volatility in the financial market globally because people are worried on the implications of the Brexit.