CAROLINE KALOMBE, Lusaka
GOVERNMENT has attributed the appreciation and stabilisation of the Kwacha to increased supply of foreign exchange arising from factors like a higher participation of foreign portfolio investors in government securities.
Minister of Finance Felix Mutati said in a statement yesterday that Government expects the exchange rate to remain stable and this will support the performance of the export and import sectors of the economy.
“The appreciation of the Kwacha is a reflection of increased supply of foreign exchange arising from, among others, a higher participation of foreign portfolio investors in government securities. Additionally, continued strong copper prices and market confidence have supported the Kwacha,” Mr Mutati said.
He said Zambia’s foreign reserves as at June this year stood at US$2.4 billion, which is translates into 3.3 months of import cover.
“The Government’s objective is to attain four months of import cover over the medium term,” Mr Mutati said.
He said the country recorded a merchandise trade balance surplus of US$186.6 million compared to a deficit of US$316.4 million in the first half of 2016.
Mr Mutati said the positive external sector performance was due to a rebound in copper and cobalt export earnings.
He, however, said non-traditional exports declined on account of a reduction in exports of maize, gemstones, cotton lint and wheat.
And Mr Mutati said the projected gross domestic product (GDP) growth rate of 4.3 percent for this year remains feasible and has attributed it to sectors such as agriculture, mining, construction, transport and storage, as well as the wholesale and retail trade.
Meanwhile, Intermarket Bank is set to resume operations soon and capitalisation of the financial institution has been done.
Shareholders will soon announce the new management team.
Mr Mutati said Government is closely monitoring developments at the bank to ensure that re-opening of the institution is done quickly.