Africa’s second largest copper producer Zambia is in a dollar supply quagmire given the recent dollarization of mining taxes suffocating the supply side of the foreign exchange flows and an arrears dismantling program that has increased demand for dollars. The Zambian authorities through its stimulus package to liquidate a portion of its outstanding to suppliers and contractors paid some Oil Marketing Companies – OMCs with bonds which were rediscounted for cash which is fueling dollar demand as players seek liquidity to fund their line of business. The recent monetary policy stance has seen a change in behavioral appetite for Kwacha…
Author: The Editor
Dr. Lubinda Habazoka, President of the celebrated think tank the Economics Association of Zambia – EAZ. Picture taken on 27 August 2020 in Nchelenge district of Luapula Province.
Africa’s copper producer Zambia on 22 August had a sudden monetary policy shift after it was announced that Dr. Denny Kalyalya was replaced with former Deputy Finance Minister and then Deputy Secretary to the Cabinet Christopher Mvunga. This move came 3 days after the third rate decision announcement for the year. Mvunga, an ex-commercial banker and certified accountant by profession comes at a time the economy faces a homogenous global threat, disease pandemic that has eroded growth with far-fetching effects as currency weakness and amplified fiscal pressure. His ascension to head monetary policy in the red metal producer is at…
Newly appointed Bank of Zambia Governor Christopher Mvunga replacing Dr. Denny Kalyalya.
LUSAKA (The Business Telegraph): Global rating agency Standards and Poor’s – S&P affirmed both Zambia’s long term issuer rating for local and foreign currency at ‘CCC’ with negative outlook. The copper producer is still cited for fiscal vulnerabilities only this time amplified by disease pandemic effects. Read also: S&P downgrades Zambia’s sovereign rating to ‘CCC’ from ‘CCC+’ on rising debt service risks Paris Club reprieve, Chinese debt and IMF Rapid Credit Facility. The red metal producer still grapples with energy bottlenecks that have in addition to COVID19 impacted its business pulse which has remained suppressed with bleak growth prospects for…
LUSAKA (The Business Telegraph) – The central bank is Africa’s copper producer Zambia sold K446million worth of fixed income government securities in a debt sale with K1.5bln on offer translating to 30% subscription. In these extraordinarily uncertain times, risk skew remains towards the shorter end of the yield curve with K322.16mln housed in the 2year tenor whose yield repriced 100 basis points higher to 31.9%. Bond lag treasury bill yield. Compared to the short of the Kwacha term structure of interest rates, bond yield remain static in elevation. Treasury bills have see significantly lower yields in the last few weeks…
LUSAKA (The Business Telegraph): Currency in Africa’s second largest copper producer Zambia has for the last week been on a losing streak as activity in the agriculture and energy space increases. This has nudged dollar demand higher sending the red metal currency 3.9% bearish to trade north of 18.9 for a unit of dollar. The copper currency sell-off is fuelled by agriculture input (fertilizer) related foreign exchange demand which has come 2 months earlier as Zambia gears up for the Farmer Input Support Program – FISP which curbs food security risks. Other drivers of the sanguine dollar appetite include dollar…
LUSAKA (The Business Telegraph): The central bank in Africa’s second largest copper hotspot exceptionally cut its benchmark interest rate 125 basis points to 8.0%, the second consecutive rate cut in the year in account of weakening consumer demand as COVID risks deepen. this brings the rate cut quantum to 350bps year to date. Zambia’s COVID cases have exponentially spiked to just shy of 10,000 and have impacted the business ecosystem sending the copper producer below 50 as measured as by Purchasing Managers Index – PMI. The red metal producer has been in contraction for 17 straight months and is currently…
LUSAKA (The Business Telegraph) – International Business Magazine has named Absa Bank Zambia PLC as the best retail bank in Zambia. Citing its commitment to service delivery, digital product offerings and competitiveness in the Zambian market, IBM rated Absa as the best bank in that space. Absa has in the COVID era unleashed state of the art digital solutions such as the NovoFX App a few months after it show cased contactless vertical card the first of its kind in the Zambian space. Absa also has a Bot providing 24/7 virtual assistance via WhatsApp a true testament of virtual machine…
LUSAKA (The Business Telegraph) – The Zambian foreign exchange market has seen a series of changes this year as the central bank constantly revises its Interbank Foreign Exchange Markets – IFEM framework rules. Disease pandemic globally has exerted pressure on emerging and frontier market currencies that sold off this year as demand for riskier assets waned causing liquidity flight to safety in the dollar, precious metals such as gold and above all US treasuries. Weak reserves and drivers of sanguine dollar demand. Pre COVID, Zambia had economic challenges key of which are balance sheet vulnerabilities, energy bottlenecks, high interest rates,…