The central bank in Africa’s second largest red metal producer Zambia will tomorrow announce its monetary policy stance in its August session. A poll done on 16 economists and financial analysts across the market reveals that 75% are of the view that the rate decision committee will keep rates unchanged at 9.0% while 12% of those polled expect a 50 basis point hike, with 6.3% expecting a 100 basis point increase. One homogenous factor across 88% of the economists and financial analysts surveyed is that global financial conditions remain a source of concern.
In the labyrinth of a debt restructure, Zambia is on the cusp of International Monetary Fund bailout as early as September when the Washington based lenders board convenes. The Southern African nation has seen inflation bottom at 9.7% after which July consumer price index rose 20 points to 9.9% as inflationary pressures mounted. With the Kwacha demand curve high up in the 20’s, yields are expected to ease in anticipation of a brighter economic outlook as the MinFin restores fiscal fitness.
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Global monetary tightening conditions have persisted as western central banks seek to reign in on excessive inflation. With wider uncertainty, a strong dollar environment has resulted while the Russo-Ukrainian war autopsy continues to dislocate world grain markets. Recessionary fears remain as copper struggles to rebound to levels north of $10,000 a metric ton.
Governor Dr. Denny Kalyalya will announce the rate decision on Wednesday August 17 in a press briefing.
The Kwacha Arbitrageur