Kwacha to stabilise, assures Kalyalya

BANK of Zambia governor Denny Kalyalya is positive the Kwacha will stabilise in the short to medium term following conclusion of the Greek bailout deal and the marginal increase in global copper prices.
Meanwhile, University of Zambia acting vice-chancellor Enala Mwase has called for effective collaboration between local and international economic researchers to provide policy-makers with empirical evidence when making policies.
Speaking to journalists after officially opening the Africa regional training workshop on advances in econometrics versus policy challenges yesterday, Dr Kalyalya said the Greece debt crisis that engulfed the Eurozone and volatility in the Chinese stock markets that lost US$3 trillion in the past weeks strengthened the dollar and weakened other currencies, including the Kwacha.
“These factors resulted in market players to think the dollar is a safe haven and it got stronger but we hope changes in the European Union will lead to stability, as well as copper prices that are picking up,” he said.
Asked if it is the policy of BoZ to wait for global indicators to improve and strengthen the Kwacha, Dr Kalyalya responded that the central bank is also working on stabilising the exchange rate.
“We don’t wait; I was just giving reference to what is happening globally because these are the markets where we send our products to. Ultimately, we need to have more diversified sources of foreign exchange to ensure stability, hence the need to export more value-added products,” he said.
Officiating at the workshop, Dr Kalyalya said a good understanding and application of econometric methods is a useful tool for decision-making.
Econometrics is the application of mathematics, statistical methods, and computer science, to economic data and is described as the branch of economics that aims to give empirical content to economic relations.
“For policy-makers, a solid exposition to econometric methods combined with an application-oriented approach provides them an opportunity to formulate and implement policies,” he said.
African Economic Research Consortium director Lemma Senbet said the institution will broaden policy engagement and its visibility to enhance capacity building.
And Professor Mwase said there is frustration among policy-makers due to lack of empirical evidence when making decisions.
“Training costs for local researchers is also a compounding factor, hence the need for stronger collaboration with foreign researchers,” she said.

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