Monday, March 9, 2009

Zambia: BoZ Offloads $53 Million Onto Foreign Exchange Market

THE Bank of Zambia (BoZ) last month offloaded a total of US$53 million on the foreign exchange market in order to mitigate the depreciation of the Kwacha against other convertible international currencies, BoZ governor, Caleb Fundanga has said.

Dr Fundanga said BoZ currently has $900 million in its reserves which it will continue to sell to sustain the foreign exchange market.

The BoZ had at the end of last year accumulated foreign exchange reserves of not less than $1 billion.

He said in an interview at Mukuba Hotel in Ndola yesterday that the central bank would continue to participate actively in the market to help sustain the Kwacha against other foreign currencies.

"The foreign exchange problem is not unique to Zambia alone but to other countries in the world and the Bank of Zambia will continue to participate actively in the foreign exchange market in order to help mitigate the depreciation of the Kwacha against other international currencies," Dr Fundanga said.

He said BoZ would not fix the foreign exchange rate as doing so would have a negative impact on the Zambian economy

"Fixing the foreign exchange rate is not good economic management because it will have a negative impact on the economy," he explained.

Dr Fundanga, who admitted that inflation was still high, also said that BoZ had no intentions of removing the zeroes from the Kwacha but added that the bank would study all types of situations regarding the issue.

He said there was need to invest more in mainly agriculture and livestock sectors in order to maintain exports.

Dr Fundanga said the country could earn more foreign exchange through exports of agro and beef products.

Copyright © 2009 The Times of Zambia, [5 March 2009].