The Rand Merchant Bank has observed that the Zambian currency was expected to record tremendous appreciation against major foreign currencies in the next few months.
Africa Analysts Rand Merchant Bank Strategist Celeste Fauconnier said the Zambian Kwacha is likely to appreciate because of the Bank of Zambia’s intervention in financial economic policies and the stability of copper prices on international market.
Ms. Fauconnier said Zambia’s copper prices were still high stating that by 2014, the nation’s currency was expected to register great improvement thereby improving the nation’s economy.
She disclosed this development during a stakeholders’ breakfast meeting held at Radisson Blu Hotel in Lusaka today.
And Ms. Fauconnier has noted that the rebasing of the Zambian currency has many benefits such as easing the way transactions are conducted and simplifying accounting processes.
She added that the rebasing of the currency has further stimulated both local and foreign confidence in the Kwacha as well as lessening the cost of customising standard accounting offering on the market.
She further explained that the value of the Kwacha will be supported by strong growth in copper production, large foreign inflows, high public external borrowing and relatively low domestic inflation.
On macro economic implications, Ms. Fauconnier noted that the gross domestic product is expected to grow from 7 to 8 percent over medium term.
She observed that large infrastructure investment, expansion in mining projects, stable copper prices and emerging consumer class were poised to record tremendous growth in the country.
She also pointed out that the public expenditure growth should be tightened in the year 2014 to 2015 to prevent an unsustainable increase in the debt stock.