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Alba Iulia
Tuesday, July 7, 2020

Forex imbalance hurting economy—BOZ

Headlines Forex imbalance hurting economy—BOZ

Bank of Zambia Governor Denny Kalyalya displays a Kwacha note to Journalists during a news briefing
Bank of Zambia Governor Denny Kalyalya displays a Kwacha note to Journalists during a news briefing


BANK of Zambia Governor Danny Kalyalya says the Central Bank is concerned at the current rate the Kwacha is depreciating against other convertible currencies.

Recently, the Kwacha traded on a very weak footing and on closed at K12. 40 following the World Bank’s cutting of Zambia’s gross domestic product (GDP) growth forecast from 3.5 pe cent to 3.3 percent.

According to the First National Bank, the Kwacha lost its strength due to strong dollar demand which is likely to see the local unit on a depreciating trend.

The Central Bank governor attributed the current movement in the exchange rate to economic fundamentals such as the supply and demand being triggered by mining companies through the export of copper, cobalt and other minerals on the international market.

In regard to the treasury bill auction, it is said to have been poorly subscribed despite more than K1.5 billion in circulation; such that with K950 million on offer, successful bids only amounted to just K290 million.

Dr Kalyalya has affirmed that lack of investors in Treasury Bills has equally affected the performance of the Kwacha.

“We have hardly any investors in treasury bills as initially the concentration was about K8.5 billion equivalent in Government bonds. So that has shrunk because we used to have somewhere 17 or so percent.”

He further notes debt service is another major source of demand hampering the supply of the Kwacha on the local market.

“Our major challenge as a country is that we have characterised ourselves as importers, which means that it hurts us because when the exchange rate depreciates, you have to cough more kwacha for the same dollar you buy.

“This is a concern to us because it means that we have surrendered our lives to others such that what happens to China or the USA becomes our fate. Is that really the case? We have enough resources that we can exploit to our own benefit,” he observes. – Courtesy of SUMA SYSTEMS.

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    • This is what happens when the president listens to, wines and dines with thugs and crooked, corrupt people, rather than technocrats.
      Really, to have Kaiser Zulu as an advisor? Freedom Sikazwe? Butvtyen again you still have learned persons whose only interest is to profit themselves rather than the nation, so they feed our leaders with garbage. A perfect example is Lubinda Habazoka. But anyway, it’s the curse of African countries

    • And someone from ‘the smart people of Zambia’ will come here and say quantitative easing is okay because US does it yet you dont balance up it with exports!!

    • The balance of payments and debt are the real issues PF has no capacity to deal with. Bane it’s us who will feel the real pinch. Just wait and see.

    • What are you doing about it?
      Kindly arrest the situation.
      Or the situation will end up arresting you.
      You means Government and you as in you BOZ governor.

    • Danny has spoken. Tomorrow morning Dollar will fetch K13. Ladies and Gentleman, it is time to dump tissue paper Kwacha and buy greenback. Lungu and his robbing thieves shall be arrested and locked up for life.

    • You can’t spend what you don’t have – Felix Mutati.
      Malls you build, Mines you sold, the oil you import, the debt you service, the cars you import, the medicine you import, the razerblade and tooth pick you import put tremendous pressure on your dollar reserve. Minister of finance is not bothered and ends up keeping the job. PF, we have too much fertile soil and fresh water. Droughts in neighboring countries – I see forex there. Diversify the economy based on policy. Go the LPM/Sikatana’s winter maize way and export the winter maize not the seasonal one. Easier said than done, mmmh? 1+1 = 2. Just how much can you grow?
      Why did you remove Felix Mutati who told you the truth? You don’t need yes bwanas, you need to be told the truth though it hurts. This truth is coming…

    • … from the inner circles rather too late.
      1. How about recording a bumper harvest on winter maize and soy?
      2. Other countries like Lesotho export wool from sheep, can’t we take that on board in the spirit of diversification?
      3. Most Western African export coffee, can Zambia fail?
      4. Kenya exports tourism, how has Zambia faired?
      POTROZ ECL, under Kalaba as FM you did alot of nasty foreign trips, we warned you. See now?
      Lastly employ Cabinet members on proven record and merit. People with the knowhow like Sikatana. What have the Ministry of Agriculture and his counterpart of livestock got to show? Business as usual, yeah?

    • ECL is a head of PF buffoons. Rot in hell you enemies of Zambia. You have done so much damage to the economy, treasury and social setup that it will take decades to recover from the same. In the name of Jesus Christ, our Lord, I refuse to forgive you. What poor children are suffering under buffoon’s monkey business, so shall your children shall suffer, so shall you suffer till you die and go to hell.

    • More damage is done by blabbering BOZ governor. Instead of working with the government that is trying its best to bring back IMF and the Chinese, he is jeopardising their efforts.

      By the way Kwacha became 14 to one dollar in October 2015 and then by the end of the year it was below 10.

      Pipos, do not be fooled by manipulators who are benefiting from chaos created by them to rip off.

      Kwacha will be back to 12 by 10th of June

      So, hold your guns

  1. You have finally come back to reality you moron. Debt serving is the root cause of this economic doldrum we find ourselves in. Call a spade a spade and not a big spoon you mappet. You have all the answers and yet you choose to mislead the masses for political expedience. A technocrat like you should be above board and exemplary. How do you borrow to buy jets instead of investing in manufacturing industries and agriculture you goons. Now you are wondering why the kwacha is depreciating?

    • What happened to our national prayers? God doesn’t hear us??? But he hears crazy Trump and murderous Israel? Akapatulula!

    • Great Greater Greatest, God does not work that way. Babylon was the richest on the planet back then, but they were godless people. They were good at managing their kingdom that is all. God has blessed Zambia, but the crooks that have stolen for generations are the problem. Israel was a ramshackle nation during Babylonian times too. So don’t feed us false narratives. This BOZ governor needs to implement measures, not just speaking.

  2. All this Koswe Mumpoto incompetence will be heaped & blamed on H.H, who’s NOT even, & has NEVER been in Government, by these Dull P.F Cadres.
    Meanwhile it’s LET’S ROLL as usual by some very educated incompetent f00lz.

  3. The PF came on board to save Zambia from Rupiah Banda’s “mess” but turned out to be worse. The economy and forex reserves went from robustly healthy to being in the intensive care unit.

    • MMD had left the books in order let’s not twist facts …if MMD left a mess there is no way Sampa would have got EUROBONDs

    • Jay Jay and that’s exactly why i purposefully used “mess” in quotes.Nothing twisted here its facts.

  4. After years of borrowing recklessly, the PF government’s chickens are coming home to roost…..I mean just take a glance at all the big govt contracts all the money has gone back…even ballot papers are still printed abroad..some moron is there with gapped teeth smiling in his new $80 million jet.

  5. This Chagwa is a joke and waste of time and resources! Absolutely no seriousness in everything! The Kwacha and the Economy are in the toilet! A wise leader will not be wasting time talking about the constitution when people’s livelihoods are at stake! Why not call for a National Indaba on the Economy like Levy did? Zambian has many better brains who are more than ready to help this clueless and proud bunch of Ignoramoses to get the kwacha and the economy back on track! The only thing Chagwa knows is how to make bad laws!

    • “He further notes debt service is another major source of demand hampering the supply of the Kwacha on the local market.”


      Now we the people of Zambia have to pay back the money Lungu and his PF have borrowed and STOLEN with INTEREST!


  6. Buti that is what we have been telling youuuu PF …..invest in targeted manufacturing to cut imports and boost exports and creat real jobs…..

    Are you now seeing what we mean ????????

  7. With the trump sanctions on Iran , expect fuel prices to raise …….we only pray we don’t have drought weather wise , otherwise riots will characterise Zambia and PFs rule in the twilight…..

  8. A story is told of a former Governor of Bank of Uganda who was killed after defying orders from President Idi Amin to print money. It is reported that Joseph Mubiru, was summoned by Amin and asked to release money urgently. The governor told Amin that the treasury did not have money. The incensed Amin said if there was no money he should print it.
    But the governor advised the president that printing more money would make it useless and its value would be as low as that of toilet paper. Mubiru further argued that printing more money would only worsen the inflation problem in the country.
    It is said that Mubiruâ’s statement angered Amin and he ordered for his killing. Mubiruâ’s death forced many Bank of Uganda workers to flee into exile including the former president general of the…

  9. Mubiruâ’s death forced many Bank of Uganda workers to flee into exile including the former president general of the Democratic Party, John Ssebaana Kizito.
    (So ,the so-called Economist are scarced of telling the truth like Joseph Mubiru,for them to appear on ZNBC TV and maintain their jobs)

  10. We have HARDLY any investors in treasury bills.

    How can anyone keep lending to a highly indebted person or country? Is this a surprise? Off course not.
    The first step in dealing with any problem is to accept there is one. But the PF are in denial. There solution to every problem is borrow and borrow and spend and spend. It is crystal clear that the debt problem is now in correction territory.

  11. so sad.how can u have dollas when everywhere are china malls.all dollas we have are now being bought by chinese chaps thru china bank.this President indeed lacks wisdom.He has destroyed the nation.Why Cant he think about our children?Why have u destroyed my party PF?i miss sata mwe

  12. There are a lot of foreigners and Zambians taking dollars outside Zambia to Zimbabwe and other countries without controls.Go to Kenya if they will ever allow you to buy forex any how and take it of that country.It is not easy as the exchange controls are such that you need to transfer money for any imports and unlike here where the USD 1000 limit is is easily circumvented by foreigner and Zambians alike who connive with bureuax officials,I can buy even USD1 million dollars in Zambia and take it out of the country by just doing a simple declaration with customs officials without asking me how I acquired the forex.And you say there a huge demand for dollars and most whichis not used to buy imports but support local currencies in other countries.Check at Nakonde Finance Bank how much forex…

  13. Carrying out analysis after analysis, observing this way or that way and morning about things is not ever going to fix our problems economically. We need tangible actions from policy makers which will create the enabling environment and put enabling resources in the hands of entrepreneurs and hard working Zambians who know how to create wealth. This is not some new or strange for this country. Just think back a few short years ago when Mwanawasa was at the helm. The Kwacha was a strong currency. Why can’t we learn from our history? I guess part of the answer is that we have wrong and misplaced priorities and to cap it all, too many pegs in round holes. That is the problem!

  14. #4.1 Gay Jay, “MMD had left the books in order let’s not twist facts …if MMD left a mess there is no way Sampa would have got EUROBONDs”.

    Thank you for re-stating the fact, that the option to govern Zambia is a trusted and trusted MMD. There you are, NOT those trib.als headed by Trib.al Hacks. Trib.al upnd is simply NO option for Zambia together with their supreme trib.al aka under 5.
    MMD forward NOT the forward of trib.als!!!

    • Hehehehe

      Dude, you need bed rest or medication ,
      You are now sounding mad……

      HH has made you mad for sure…..

  15. Seriously. The governor thinks the exchange rate is the economy.

    It’s just an indicator of the trade imbalance. If it falls, exporters gain. He should be putting up facilities encouraging exports and not speaking like a first-year FINDECO House based University economics student.

  16. There are no manufacturing companies in Zambia.These politicians lack vision.Even when they steal they just build houses instead of coming up with manufacturing companies to create employment. So sad .I hate when i hear Europeans insult us that we don’t think. Seriously how can steal and invest only in houses and lodges?So shameful with such leaders.We need PF through NDC.Ba Kambwili atleast u remind us of ba Sata.Please go for it but be careful with HH.We don’t like UPND coz it can bring confusion in the country thru tribal divisions.It’s members just show that.Careful working with HH coz their agenda is to send HH to state house

  17. I think the governor cant take it any more. The way he is coming out is like no one is listening in PF government. I will advise him just to resign instead of his name to be tarnished by people who are all about politics.

  18. If we are waiting for PF to give us any solutions,there will be no Zambia to talk about. It is all going to be partitioned by the Creditors. The time for PF to go is now and not tomorrow.

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