Just over a year after being named Zambia’s central bank governor taking over of Dr. Denny Kalyalya, Christopher Mvunga resigned from his role as Bank of Zambia head. This was established in a press statement from state house on September 07. President Hichilema has also designated Dr. Francis Chipimo the current Deputy Governor Operations to act as Bank of Zambia (BOZ) Governor following the resignation of Mr. Christopher Mvunga, who at the time of his resignation was serving as Governor of the Central Bank.
“We have made ministerial appointments such as in the Ministry of Finance, we don’t want a single short learning curve, we want to get into business right away, you will see from our choice of Bank of Zambia Governor,” President Hakainde Hichilema said in an interview with BBC News Anchor Lukwesa Burak.
RISK APPETITE IS CLAWING BACK INTO THE ZAMBIAN MARKET
The Zambian economy has seen claw back of risk appetite following a boost in sentiment causing a currency and bond rally in anticipation of supportive policies and IMF deal buy in. The copper currency has extended a winning streak north of 16.8% (since declaration of Hichilema as winner of the August 12 poll) while fixed income yields compressed an average of 606.6 basis points in the August 27 bond sale as offshore’s gold rushed Kwacha government securities factoring in subsided political risks.
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Mvunga in his last rate decision meeting (the pen ultimate for the year 2021) announcement on September 01, kept the benchmark interest rate unchanged at 8.5% justifying this stance by easing inflation risks as the currency strengthened significantly.
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This is not the first time Dr. Chipimo will hold fort as he was in the same capacity in the transition between the termination of Dr. Kalyalya’s contract before Mvunga’s appointment was nodded by parliament in August of last year. Chipimo has been at the helm of monetary policy in the most turbulent of times leveraging off his vast experience having served at the BOZ for over a decade and half years in senior capacities.
Acting Bank of Zambia Governor Dr. Francis Chipimo.
POLICY CHANGES SPECULATIVELY ANTICIPATED UNDER NEW REGIME
Market players remain expectant around potential policy changes in the central banking space following some of the hurdles in the foreign exchange market faculty such as constriction in the currency market following a decision by the authorities in the previous regime requesting the mines to dollarize mineral royalties. This is said to have sucked over 55% of foreign exchange activity from the open market contributing to the rapid depreciation of the copper currency in previous periods.
The Kwacha Arbitrageur