Tough economic measures right tonic to support growth, says Kalyalya

THE Bank of Zambia (BoZ) says measures which appear to be stringent that it is putting in place are meant to support the country’s robust economic growth.

In reference to the recent raise of the Monetary Policy Rate (MPR) by 150 basis points to 12.5 percent from 11 percent, BoZ Governor, Denny Kalyalya, stressed the importance of such measures to the country’s growth.

Dr Kalyalya said at the last quarterly MPR media briefing in Lusaka that much as the move may appear not be supporting the activities of the players out there, it was there for a robust growth.

“Notwithstanding, the challenges being faced, currently when we look over the horizon in the medium and long term the prospects for our country are strong.

“Growth prospects are more optimistic over the medium-term relative to the November projection. This mainly reflects projected recovery in mining, agriculture as well as wholesale and retail sectors,” Dr Kalyalya said.

He also pointed out that efforts to control inflation which might seem painful would make Zambia better ahead.

Meanwhile, Dr Kalyalya said the turnover in the interbank foreign exchange market reduced significantly to US$14.4 million from US$185 million in the previous quarter due to low supply.

He attributed the reduction to less trading among banks.

“The interaction among banks is but not exist able which means there is not much trading among the institutions. this is the issue we are saying that if we are to grow the economy, we have to diversify our sources of money, yes banks buy dollars from market participants but also are position to support exporters.

“We are encouraging them to onboard exporters so they can begin to generate more foreign exchange as well,” Dr Kalyalya said.