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Alba Iulia
Saturday, June 6, 2020

Kwacha to continue being strong-Stanbic

Economy Kwacha to continue being strong-Stanbic

New Kwacha Notes

STANBIC Bank predicts that the Kwacha will generally continue trading on a sound footing against the United States dollar, supported by positive macroeconomic indicators.

This is premised on positive macroeconomic fundamentals such as low inflation which is in single digit, reduced monetary policy rate (MPR) and statutory reserve ratio (SRR) both at 12.5 percent.

Stanbic Bank head of global markets Victor Chileshe cited the reduction in MPR and SRR, which will trigger a further drop in interest rates and stable liquidity in the money market, as factors that will cushion the Kwacha.

Currently, the Kwacha is trading in the range of K9.2- K9.3 against the greenback.

In an interview on Monday, Mr Chileshe said with the central bank taking necessary measures of ensuring low inflation at 6.7 percent, this has a positive bearing on the exchange rate.

“I do not see any sharp depreciation [in the Kwacha] and we might not see it this half of the year nor in the third quarter. We project the Kwacha to continue trading between K9.0 and K9.5 – much better than last year,” he said.

Mr Chileshe said economic activities have improved with projections of continued optimism in the economy.

“Over and above, we have seen a slash in rates on the monetary policy side, the cost of deposits, which had escalated last year, is beginning to wash out, with new deposits being contracted at a lower rate and the benefits are being passed on to the public. There will also be improved credit being extended,” he said.

On possibilities of the Kwacha weakening, Mr Chileshe allayed fears as the anticipated International Monetary Fund bail-out will cushion any possible shocks.

“Liquidity has been unlocked…The more credit we extend, we see a lot more imports. For example, someone would want to buy a car or, say, farming equipment – all these will result in the import bill going up.

“This in itself will kind of increase demand for the greenback and put pressure on the Kwacha, which is more driven on import demand as opposed to dwindling exports but the reserves will help,” he said.

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  1. Don’t let PF bandits through Mutati mislead Stanbic bank. No matter how much the predictions about the plummeted kwacha gaining, nothing economically tangible will be achieved under PF bandits.
    PF bandits are insinuating that the increment of electricity tariffs will be of benefit to the treasury, no, not at all. Wait for ripple effects on the major increase of other commodities in price. Soon fuel, food, accommodation & standards of living will be up. As a result of the plummeted economy without production under PF bandits of blind Lungu, the economy will be worse than it is today.
    How much is mealie meal? In a couple of weeks, fuel per litre will be @K21~watch this space of PF failures.
    The Skeleton Key

    • Ha!ha! Typical UPND mentality – cant face reality that is why they cant accept that HH lost elections last year. They would be celebrating very loudly if it was predicted that the Kwacha would fall. In fact they would welcome Zim dollar type devaluation if it would put HH in state house.

    • All these positives are burning upnd’s hearts badly. Armmagedon is slowly and surely disintegrating…Judge Chitabo threw a spanner in the works of the petition yesterday…their international partners have been discredited by the rest of the world-an EU delegation went o state house to pledge their commitment to support the current govt. after a small group of socialist/democrats from Europe who are network partners of upnd tried to push the EU parliament to condemn hh’s arrest…world bank has already given the govt. $600m for rural development, imf to follow suit…copper price and production on the upswing….yaba!!!…what’s the next step, donkeys???

  2. The Kwacha strength is FAKE because BoZ is not printing money to offset the negative BOPs by paying creditors. There’s little money in circulation which has collapsed the economy.

    Therefore the value of the kwacha is hollow.

    It’s like a patient is in a coma & you refuse to put oxygen, saying we are saving money for the coffin. It’s the same with load-shedding. The Govt would rather save money by rationing electricity & kill the economy than import power from RSA & DRC which would have boosted the economy & revenue.

    If you’ve been to Zambia of late, you’ll feel PF’s failed economic policies.


  3. Stanbic is an international institution and can not be manipulated by BoZ.In fact it’s these international banks that give us a of what’s happening in money markets. You want to win the presidency at all costs even to see Zambia suffer.

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