The Bank of Zambia has decided to hike the benchmark interest rate by 100 basis points to 11.0% in its ultimate meeting of the year. This is the fourth rate hike which is aimed at stemming rising inflationary pressures. This was announced by central bank governor Dr. Denny Kalyalya in the capital Lusaka. Citing the hike, was the need to curb rising price pressures from both food and non-food sources which have been threatening realignment efforts to tame it within the 6-8% target band. Kalyalya cited currency depreciation as another key driver of fuel prices contributing to cost push effects…
Author: The Editor
Barely three weeks after an announcement to raise the statutory reserve ratio 300 basis points to 14.5% for both local and foreign currency, the central bank in Africa’s red metal hotspot Zambia on 21 November pulled the cash level 250 bps upwards to 17%. This will be ffective 27 November as communicated to commercial banks. The further increase in the statutory reserve ratio is necessitated by persistence of foreign exchange market pressures which are contributing to higher inflation, the memo carried. The Southern African nation has seen its currency shave 21.9% year to date to trade at record levels. This…
The central bank in Africa’s second largest copper producer has raised its cash reserve requirement by 300 basis points to 14.5% both on foreign and local currency in a move to curb notorious inflationary pressure. This monetary tightening move comes in the wake of evelated pricess pressures as the southern african nation grapples with a persistent currency slide breeding cost push effects. Zambia headlined 12.6% for October a steep jump from 10.8% while the Bank of Zambia in its last monetary policy communique forecast prices pressures that would keep the consumer price index outside the 6-8% target band until first…
Africa’s second largest copper producer Zambia is on the verge of a successful Eurobond restructure after its authorities reached a landmark consensus concerning its $3 billion worth of outstanding dollar bonds. Zambia’s finance ministry reported in a note that the three outstanding bonds will be reorganized into two fixed income assets of size $2 billion and $1.135 billion maturing 2035 and 2053 respectively. This development does brighten the Southern African nations prospects through shifting its production possibility frontier in addition to plethora of positives. Hamstrung by debt distress over the years, accumulated by international capital market fixed income issuances purportedly…
For the seventh year running the Absa Africa Financial Markets index continues to track performance of financial markets on the continent across 6 key pillars namely market depth, access to foreign exchange, market transparency, capacity of local investors, the macroeconomic environment and legal standards – enforceability. It is about a dry point of construction that the chaotic state of the global environment has roiled markets on the back of heightened geopolitics that have impacted grain, foreign exchange and energy markets whose volatility continues to transmit input, energy and food inflation to nations. This has kept most global central banks outside…
For the seventh year running the Absa Africa Financial Markets index continues to track performance of financial markets on the continent across 6 key pillars namely market depth, access to foreign exchange, market transparency, capacity of local investors, the macroeconomic environment and legal standards – enforceability. It is about a dry point of construction that the chaotic state of the global environment has roiled markets on the back of heightened geopolitics that have impacted grain, foreign exchange and energy markets whose volatility continues to transmit input, energy and food inflation to nations. This has kept most global central banks outside…
We all share a unified dream: financial prosperity and stability. As I recently navigated my pre-retirement benefit claim from the National Pension Scheme Authority (NAPSA), Zambia’s flagship pension scheme, I embarked on a journey of introspection, shedding light on the nuances of wealth accumulation. My assessment of the globalized world with its fluctuating currencies and intertwined economic destinies prompted crucial questions: Are our pension returns in Zambia truly on par with our counterparts in developed nations? Do the returns genuinely match our aspirations, especially when benchmarked against global standards? Do the returns we are receiving genuinely reflect the best possible…
With 10 year treasuries at 16 year highs given the state of the global economy following 12 month of monetary tightening which has curbed inflation, offshores are looking to emerging and frontier markets for higher yields despite the underlying sovereign risks. One such darling to offshore players is Africa’s red metal hotspot Zambia currently in the middle of debt restructure negotiations. In a government debt sale on 29 September coinciding with presentation of its 2024 national budget, the Bank of Zambia sold K2.6 billion worth of bonds in an offer whose market appetite saw K6.9 billion worth of interest. Theming…
Africa’s second largest copper producer Zambia today witnessed unveiling of a K178 billion budget themed unlocking economic potential. Finance Minister Situmbeko Musokotwane revealed a 6.5% bigger estimate of revenues and expenditures as he seeks to widen the red metal producers production possibilities amidst reorganization of its fiscal obligations. Musokotwane faces rising inflation and a debt quagmire for which restructure is in motion. The Southern African nation in principle reached a $6.3 billion debt treatment in June of 2022 however memoranda of understanding are yet to be signed off. This remains critical for success of private creditor negotiations currently ongoing. The…
Mobile money flows and transactability rose 38% in the first half of 2023 breeding cybersecurity risks. In his presentation of the 2024 budget themed unlocking economic potential, Zambia’s finance ministry Situmbeko Musokotwane revealed that mobile money flows rose to K200 billion in 1H23 representing a 38% increase year on year. “It is for this reason that the Bank of Zambia issued Cybersecurity Guidelines in May this year to help with curbing threats,” Musokotwane said. The Southern African nation has seen rapid growth in usage of mobile money platforms, an appetite which scaled exponentially high during the COVID 19 pandemic period. This has…