Foreign exchange reserves in Africa’s second largest copper producer Zambia, slid 2% to USD1,598 million (Oct.18) compared to USD1,630 million (Sept.18). This was according to the central banks fortnight statistics. Reserves slid 23% in 2018 from USD2,081 million (Dec.17).
This translates to 1.9 months import cover below the targeted 3 months which the MinFin is trying to address. Law makers in Zambia in October last year allowed for mineral royalty tax submission by the mines in dollars directly to the mines in the central banks quest to shore up reserves.
With the current debt sustainability concerns, the low inventory of foreign exchange reserves make the copper producer susceptible to external shocks.