FX reserves slide 5% to $1.73 billion in Africa’s second largest copper hotspot
- Foreign currency reserves hit record low in Sept.
- Markets eager to see Q4 levels to factor mineral royalty remittances
The Finance Ministry in Africa’s second largest copper hot spot Zambia, announced that foreign currency reserves have declined to USD1.73bn. This was contained in a Q3: 2018 Fiscal performance statement presented by MinFin Minister Margaret Mwanakatwe.
FX reserves have been on a softening trajectory plummeting 4.68% to USD1.73bn ( 30 Sept.) from USD1.815bn (30 Jun.). This then slides import cover to 2 -months, below the interim targeted 3 – months.
Zambian law makers earlier in August, resolved for the mines to remit mineral royalty taxes in dollars directly to the Bank of Zambia (BOZ). This was a move aimed at shoring up reserves which would arm the central bank to smoothen potential currency fluctuations as mandated. Market Analysts are keen to see the impact of the mineral royalty tax remittances to the BOZ in the Q4:2018 fiscal quarterly update.
The Southern African nation is in the middle of an IMF Article IV mission visit led by Mr. Dhaneshwar Ghura. Zambia courted the IMF on the sidelines in Bali, Indonesia earlier in August at the Governors and Finance Ministers Annual meeting.
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