KALONDE NYATI, Washington
BANK of Zambia (BoZ) says the appreciation of the Kwacha against the United States (US) dollar is genuine as it has been triggered by a cocktail of factors contrary to sentiments by some sections of society that the upward trend is artificial.
BoZ governor Denny Kalyalya attributed the increase to, among other factors, increased investor confidence in the economy as demonstrated by Mopani Copper Minesâ€™ parent company Glencoreâ€™s commitment to expand operations in the country, weakening dollar and tight monetary measures put in place by the central bank.
Dr Kalyalya said on Tuesday when he addressed staff at the Zambian mission here that the dollar supply has also increased as corporates offload the dollar to meet monthly and quarterly tax obligations as well as individuals that were holding on to the greenback in anticipation of a further Kwacha depreciation, thus contributing to the upward trend.
On Tuesday, the foreign exchange market witnessed an increase in dollar supply of about US$ 25 million against the demand of about US$7 million.
â€œThe current appreciation of the Kwacha is backed by several factors. The rebound of the copper prices on the international market has also contributed to the appreciation. It is important for the public to understand that the development is genuine,â€ he said.
Dr Kalyalya who is in Washington DC to attend the International Monetary Fund-World Bank spring meetings with Minister of Finance Alexander Chikwanda and Secretary to the Treasury Fredson Yamba said the local unit that had depreciated in the past months, putting pressure on the economy, is trending on a positive path.
He said sound monetary policies by the central bank, bolstered investor confidence, among other factors will continue to boost the Kwacha.
Dr Kalyalya also said growing specific crops in ecological zones will also reduce on crop failure as many farmers where growing maize in areas where the crop is suitable.
On the slow economic growth Zambia and other countries are facing, Mr Chikwanda said the country needs to reorganise itself if it is to weather the storm.
The IMF in its latest World Economic Outlook anticipates a slight acceleration in global growth from 3.1 percent to 3.2 percent, with Zambiaâ€™s growth remaining subdued at 3.4 percent from 3.6 percent recorded last year owing to power outages and downward pressure from low copper prices.
â€œWe need to think anew to weather the stormâ€¦we need to talk and walk diversification,â€ he said.
Mr Chikwanda said Government will remain committed in ensuring prudent fiscal and monetary policies to cushion the economic shocks.
KALONDE NYATI, Washington