NEW YORK (Tuesday, September 30,2015) — The Government is concerned with the current developments in the foreign exchange market, where the Kwacha has depreciated sharply against major foreign currencies.
Notwithstanding the adverse global economic developments, the sharp depreciation of the Kwacha is excessive and not consistent with the movements in the fundamental drivers of the exchange rate.
The Government, through the Bank of Zambia, is closely monitoring developments and is taking necessary and appropriate measures to stabilise the exchange rate in order to ensure that it is consistent with the economic fundamentals.
These measures will be complemented by prudent fiscal management and in this regard His Excellency, Mr. Edgar Chagwa Lungu, President of the Republic of Zambia, has directed that increased fiscal interventions be made to improve the existing economic fundamentals so that there is favourable foreign exchange liquidity in the market.
The Governor of the Reserve Bank has assured the President that various measures are being implemented by the Bank of Zambia. The President is satisfied that the Monetary Policy Committee in consultation with the Ministry of Finance, will continue with measured interventions and monitor market trends to ensure the foreign exchange market is normalised.
The Head of State wishes to reiterate Government’s commitment to maintaining a liberalised foreign exchange market. The business community and the general public are therefore urged not to panic, as the Government does not intend to revert to foreign exchange controls to shore up the currency and as a measure to cure the speculative distortions.
The President has emphasised that speculative behaviour is therefore unnecessary and market players are urged to play by the rules consistent with the values of a free market economy.
SPECIAL ASSISTANT TO THE PRESIDENT
(PRESS & PUBLIC RELATIONS)