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Alba Iulia
Tuesday, January 18, 2022

ABSA Zambia expects BoZ Governor to be replaced, Kwacha to appreciate to K15.0 per dollar

Headlines ABSA Zambia expects BoZ Governor to be replaced, Kwacha to appreciate to...

Bank of Zambia Governor Christopher Mvunga
Bank of Zambia Governor Christopher Mvunga

AbSA Zambia says it expects Bank of Zambia Governor Christopher Mvunga to be soon replaced by the incoming government.

In a brief analysis, the bank says Mr Mvunga is expected to be replaced very soon.

“The same is expected with other presidential appointees (Security wings, Permanent secretaries, Secretary to the Treasury, Utility Company chief executives, NAPSA, ZRA etc,” the bank said.

It said this is a usual trend whenever there is a change of government.

“Significant structural and some policy changes are expected in the government agencies. Financial and budgetary reforms as we head into the budget season are also expected,” it said.

“It will be key to see the 2022 national budget to be presented in October this year.”

ABSA Zambia also said that removal of middlemen in the fuel and agriculture sector that added little value but increased government cost in Crude oil importation and Fertilizer Support Programme is expected.

“Reforms in the FX Market are expected to come – Mineral royalty taxes and other mining statutory obligations may be collected in ZMW once again allowing increased FX supply on the market which will support the Kwacha.”

It said further direct Central Bank intervention to force a Kwacha appreciation like the one observer during run up to elections will stop.

“The Kwacha is expected to appreciate against the US Dollar in the short to medium term from the current 19.3 to 15.0 on the back of positive market sentiment/investor confidence,” it said.

It stated that the UPND government is projecting a rate of 10.0 USD/ZMW.

“The offshore investors that sold USD and bought Zambian government bonds in the last 2 to 3 months at yields averaging 34% are expected to continue aggressively participating in the auctions.”

It added, “We have already noted offshore investors trying to sell dollars today and position to buy more bonds in the next auction, implying a rally in the bond market.”

“The dollar flows will help support the kwacha appreciation and interest rates are expected to start going down (full shift of the yield curve which will filter to other market interest rates). We expect market rates to drop 400 – 500 basis points on average in the short term,” It said.

“The BOZ Bond Buy-Back program that had commenced last year is likely to be stopped despite it having been planned for the full year 2021. The continuation of this will depend on the objectives of the new Governor and Minister of Finance. Public expenditure tightening and close monitoring and accountability is expected.”

ABSA Zambia noted that IMF Programme implementation is expected to resume with some measure of confidence in the governance system.

“A fully funded program is expected and the new government will utilize the $1.4 billion SDR which may most likely be used to boost FX reserves. There’s also an expectation that the IMF program will be concluded in the very short term and at a faster pace than was the case with the previous government.”

It also anticipates that rating agencies will improve Zambia’s rating (from Junk) and outlook in the medium term as the political risk is reduced and with a funded IMF program on board.

“A review of mining tax regime which has been poised to offer huge concessions to the mining corporates at the expense of personal income tax as the new government endeavors to empower the masses.”

49 COMMENTS

  1. YIPPEEEEEE ZRA NEW COMMISSIONER WELCLCOME
    THIS CHAP HAS PUT ZRA IN A VERY BAD POSITION LET HIM JOIN THE OTHER PF G00NS IN THE REAL WORLD

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  2. HEHH winning was always going to be bad news for some of us who were still buying properties in zambia.

    If lungu had won , the projected rate of $/Zkwa was 1/35…….that was sweet music to foringe investors.

    We now expect a very strong kwacha.

    HEHH knows numbers.

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  3. @ Albert, what patriots? You mean the gang of thieves wehave just booted out?
    Who would want this drunk to be a Governor of a Reserve bank? Only a clueless moron like Lungu

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  4. So Absa is in charge of our country? Poor Mvunga is not adequately qualified but he inherited a fast falling Kwacha. I don’t remember the honorable doctor being replaced as Governor of Boz by the PF when they took over.

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  5. Mvunga is NOT qualified to be our Central Bank Governor.
    I know because I have a PhD in Economics.
    He is clueless about monetary policies and many other things in Economics.
    BOZ Governor is for an Economist only.

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  6. Kwacha is already trading at K16.5 even before HH has been sworn in and jokers like KZ wanted us to continue with Lungu the clown as president. SMH. No one cares about your tribal nonsense KZ, thats for tiny minds. That’s why Zambians voted you out. Insoni bane.

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  7. Dudelove continue celebrating that superficial appreciation of kwacha. It will blow over and correct itself. We call that speculation induced gain. You are too dull to understand this. I have worked in government for years and know what I am talking about.

    By the way if things are so good why is your ugly head still in another country?

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  8. Dudelove continue celebrating that superficial appreciation of kwacha. It will blow over and correct itself. We call that speculation induced gain. You are too dull to understand this. I have worked in government for years and know what I am talking about.

    By the way if things are so good why is your ugly head still in another country?

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  9. Dudelove where’s the Kwacha trading at 16 to a dollar. Selling is at 18. 8 and buying at 18.5. This has been the case for the past month.

  10. In other countries you begin to hand in your resignation letters if you hold a particular office upon the change of guard.

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  11. The people who run governments are powerful people in other republics in banks, businesses, money market and so on. Life may be a cheat. It su.cks.

  12. Very interesting to read all news papers these days it has added value to reading news.
    It will be more of a drama when the new president starts making the common mistakes made by every politician and especially that he is a guilty man trying to hide the loot from privatization.

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  13. @ De Javu Kwacha is trading at K16.5 in some Bureaus in Kitwe. In Lusaka it is at K17 and dropping so am not sure which rates you are looking at. Even Macky 2 posted the rates on his page and he is a PF chap. ABSA have projected a kwacha rate of K15 by inauguration day.

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  14. Dudelove for your information Absa have issued a statement that what you are reading on this page is not coming from them. I may be wrong but going by your flag you are not even in Zambia. Please tell which bureaus are trading at your rate. I’m in Kitwe at Edinburgh Hotel and I don’t see any of what you are saying. Give me the name.

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  15. Its very good to read positive articles about my country Zambia. I thank you people of Zambia for kicking out Lazy Lungu and his kakistocracy govt.

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  16. The chief tribalist KZ still thinks PF could bounce back. Hahahahahaha. Welcome to the real would. You thought PF was irreplaceable.

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  17. @Deja Vu #27. Don’t bother about the flag. Dudelove may be enjoying the fruits of VPN clouding his whereabouts in this global village.
    But I wish to know too which one of many Kitwe bureaux de change businesses, currency exchange services, is selling at that unbelievable low cost? K16½???

  18. We’ve seen this before, people dancing in the streets because cobra was going to save everyone. We never learn. Keep your leaders in check and put pressure on service delivery. UPND are moving so fast and hopefully not towards the exit. Zambia needs steady hands right now.

  19. Mulongoti I have checked many exchange centres there’s none that is at less than 18 Kwacha. Absa have also distanced themselves from this story.

  20. They are using ABSA to authenticate and rubber stamp some news item to prove a lie of, elect me in the morning and before day ends your currency rate would have improved.
    This entire article smells of a political rattus. How does ABSA chief sound like he is a Zambian government official. Look at the words used purportedly coming from a bank. Shame.

  21. As for me, I’m still confused what ECL had smoked to appointment Chris Mvunga the BOZ Governor. I think the main reason for this appointment is ECL payback to Patrick Mvunga, Chris’s brother.

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  22. Kaizar Zulu, what job did you do in the PF again? Remind us pls

    Most people know you were the main carrier for looted/ stolen money by your political masters. You looted too, that’s how come your name is among the 25 most wanted thieves fr the former regime & for you, we won’t rest.

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  23. @KZ the looser troll,when will you ever shut up.Sit down and think why you are such a bitter,hatefull Person….

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  24. This is the script of Tonga girl, Mizinga Shansonga Melu, ABSA CEO as she celebrates the win of fellow tribes person HH. I am sure she is hoping to be made BOZ governor with an MBA.

  25. VERY REALISTIC THE INCOMING GOVT HAS RESTORED INVESTOR CONFIDENCE IN OUR ECONOMY AND BY MID NEXT YEAR BELIEVE THE EXCHANGE RATE WILL K8.OO = US$1.00. ALREADY THE ZAMBIA POLICE SERVICE IS SLOWLY AWAKENING UP AND PUBLIC CONFIDENCE IS BEING RESTORED. YOU CAN’T EXPECT INVESTORS TO COME ON BOARD WHERE THERE IS LAWLESSNESS. WE REACHED A POINT WHERE IMPORTATION OF FUEL WAS SURRENDERED TO THE PRIVATE HANDS AND FERTILIZER SUPPLY WAS BEING SUPPLIED AT INFLATED AT ABNORMAL PRICE, MAIZE EXPORTATION BY A FEW CHOSEN PF ANGLES. THE WHOLE ECONOMY WAS AT THE MESS OF PF GANGS UNDER THE DISGUISE OF DEFUCT POLITICAL PARTY IN THE NAME OF PF. SOME KNOWN CADRES COULD EVEN SMUGGLE LIQUIOR AND OTHER THINGS UNDER THE WATCH OF ZRA. CADRES WOULD WALK INTO ZAF, ARMY, ZNS ETC FINANCE OFFICES SUPPLY AIR AND GET PAID…

  26. When the Kwacha started to appreciate albeit slowly, you people said it was political gymnastics and it has continued to gain then after elections you say it’s because of HH when he’s not even been sworn in. You people have a problem with imagination. Give the new people time to settle in those swing chairs.

  27. Maawe, the way tables have turned is hilarious. It’s obvious the 18 to 34 year olds were the decisive factor in the last elections. If you’re above or below that age group, your opinion doesn’t matter. Your chance was in yester years. Go sit in the gallery and just watch.

  28. KZ thought PF would be in Power forever. He was Power drunk and is now shell shocked after his boss lost the August 12 Elections. Unlike 2016 KZ failed to rig the 2021 Elections. The Youths were far ahead of the PF Election Rigging Team. Now KZ’s Corruption crimes will be revisited and the Man could end up in Jail. Tough times for KZ and fellow PF Election Riggers. Time will tell.

  29. At XE.com the kwacha to dollar is at K17.7. Other places show slightly higher or lower. Rates are never the same. Others are cashing in on this while others are losing. The point is that there is an appreciation of the kwacha which is good news.

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