THE Bank of Zambia says it is confident that the Kwacha will remain fairly stable going forward.
During a media briefing at the Bank of Zambia stand at the ongoing Zambia International Trade Fair, BOZ senior director for monetary policy, Peter Banda said the Kwacha had been fairly stable and that the measures the central bank took two months ago were working.
“Currently, the Kwacha has depreciated by 13 per cent from the close of 2013. This is much lower than the figures which were reported in April and May when we had high volatility, and the Kwacha was depreciating rapidly. The Kwacha has been fairly stable; the mid-rate at BoZ has been hovering around K6.2 to the dollar. It is in that range and fairly stable for now, and we are confident that it should remain stable going forward,” Banda said.
He said even with the revocation of Statutory Instrument (SI) 55, the BoZ was able to monitor foreign exchange outflows.
“The SIs were only vehicles for enforcing a law which is still in place. But what SI 55 did is that it gave more of a direct mechanism to the backing of the law monitoring those flows. But even with the revocation of SI 55 we are still monitoring foreign flows,” he said.
Banda said in terms of SI 53, the Kwacha still remains legal tender and there were sufficient laws which provided for the Kwacha to be legal tender.
“Despite the SIs being revoked, it wasn’t the actual law which was revoked. I should emphasise that the actual law was really not revoked; it is the vehicles in which these laws were being enforced which was revoked,” he said.
And BoZ economic director, Dr Francis Chipimo, said the sustainability of the country’s debt is something that should be closely monitored.
“Debt sustainability is something that we should keep an eye on and I think currently we had a debt sustainability analysis done by the IMF and the World Bank and recurrently the government also did a sustainability debt analysis. If you look at both our external and domestic debt, it is around 30 per cent of GDP which is a lot lower than the thresholds which are recognised internationally, so our debt position is sustainable,” said Dr Chipimo.
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