KALONDE NYATI, Lusaka
ZAMBIA’S growth path has continued to attract off-shore and portfolio investors as demonstrated by the performance of the Eurobond on the global market and local securities.
Stanbic Bank head of global markets Victor Chileshe said with or without the International Monetary Fund (IMF) bail-out, Zambia’ s growth trajectory remains positive due to Government’s resolve to the economy.
The development has resulted in the country’s Eurobonds being on demand.
Currently, Eurobonds are trading around US$98.
Mr Chileshe said Government’s resolve to address the fiscal deficit gap coupled with other positive economic fundamentals prevailing in the country has re-positioned the country as a favourable economy.
“Inflation has been contained. Government is also beginning to address some of the fiscal issues and all these interventions have made Zambia the flavor of the moment.
He also said the period of high rate rates is being subdued as demonstrated by the reduction in the MPR, which has reduced to 12.5 percent from 14 percent, and the Statutory Reserve Ratio (SRR) to 12.5 percent from 15.5 percent by the central bank.
He said with the continued reduction in the MPR and the SRR, banks are expected to respond by reducing interest rates, which will subsequently make finance affordable for the public.
At the same event, Stanbic Bank chief executive officer Charles Mudiwa said the bank will, effective Thursday, May 25, reduce MPR-linked loans by 1.5 percent.
Mr Mudiwa said the reduction in interest rates would immediately pass on the benefit to customers and lower the cost of credit, thereby increasing economic activity in the productive sectors of the economy and lessening the burden on borrowers.
“The BoZ has set the benchmark and we must complement the central bank’s efforts by also reducing our rates,” he said.
Mr Mudiwa said the actions taken by the central bank clearly indicates that the local economy set for a turnaround.
Stanbic Bank Zambia supports over 10,000 local business banking customers in their operations, providing about K1.4 billion of loans and advances to them.