PRIVATE SECTOR LENDING IMPROVES
LENDING to the private sector has picked up by 16.3 percent, as interest rates generally decline during the first half of this year.
This has largely been supported by increased disbursements from the Bank of Zambia (BoZ) Targeted Medium Term Refinancing Facility ( TMTRF), according to the Central Bank Governor, Christopher Mvunga.
Mvungaexplained that the expansion in domestic credit to Government slowed down further to 48.3 percent from 69.6 as commercial banks scaled down the accumulation of Government securities.
“During the same period, money supply continued to expand growing by 48.3 percent from 39.6 percent largely driven by the accumulation of international reserves,” he told the press this week in Lusaka.
Mr Mvunga therefore encouraged the private sector to fully participate in the growth of the economy. He emphasised that the economy needed to be driven by the private sector participation.
“The challenge is that the economy needs full participation of the private sector for it to grow,” Mr Mvunga said.
On interest rates, Mr Mvunga indicated that the rates generally declined, partly reflecting the fall in yield rated on Government securities on the back of heightened demand.
He said yield rates on treasury bills and Government bonds declined to 21.9 percent and 31.2 percent from 22.3 percent and 33.7 percent, respectively.
“Similarly, commercial bank’s nominal average lending rate declined to 25.6 percent in June from 26.0 percent in March. The average 180-day deposit rate remained broadly unchanged at 9.8 percent.
“By end August, the weighted average yield rates on Government securities registered a marked decline to 23.9 percent and 29.3 percent for treasury bills and Government bonds, respectively, owing to overwhelming demand,” Mr Mvunga said.