BOZ- offloads $178 million onto the market to cushion the depreciation of the kwacha

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The Bank of Zambia -BOZ- has offloaded 1-hundred and 78-million US Dollars onto the market to cushion the depreciation of the kwacha against major convertible currencies. The Move by the central Bank has been necessitated by the depreciation of the local currency by 15 percent in the last three months, a development that has seen Commercial banks currently sell the dollar at 6-kwacha. And Central Bank Governor MICHAEL GONDWE says the selling of the US dollars is meant to support the relatively low supply of foreign exchange and moderate volatility in the foreign exchange market. Speaking during a BOZ quarterly briefing in Lusaka today, DR. GONDWE says the measures employed by the Central Bank are meant to dampen pressures of the exchange rate. He reveals that BOZ as part of interventions has also increased the statutory reserve requirement from 8 to 14 percent with effect from March 2014. The Central Bank Chief further reveals that BoZ has also increased the Policy Rate by 50 basis points to 10.25 percent effective March 1st 2014. He says recent developments in the foreign exchange market reflect responses to the country’s growth needs and changes in the international environment. Meanwhile DR. GONDWE has revealed that Gross International Reserves have decreased to 2.7 billion US dollars as at close of February 2014 from about 2.8 billion dollars due to foreign exchange sales aimed at supporting the market payments related to oil procurement. He has also noted that Zambia’s economic prospects for 2014 have remained strong with growth set to be driven by sectors such as agriculture, manufacturing and mining among others.

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