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Edgar Lungu

LUSAKA – The measured response by Zambia’s central bank to the turbulence in the kwacha exchange rate has helped towards its recovery, President Edgar Lungu said yesterday.

The Bank of Zambia raised interest rates by 300 basis points in November in a bid to curb inflationary pressures stemming from the sharply weaker kwacha, but left them on hold in February, citing concerns about slowing growth.

“My administration has the full confidence in the leadership of the central bank which is why we allow them the necessary autonomy to execute monetary policy professionally as they can,” he said in a statement.

“The synergy between officials handling fiscal and monetary policy gives me even greater confidence that we are on a recovery path.”

The kwacha has recouped some of last year’s heavy losses which were mainly triggered by a sharp slide in the price of copper, although it has come under renewed pressure this week after a credit rating downgrade from Moody’s.

Mr Lungu criticised politicians and analysts who have dismissed the kwacha’s recovery as a political gimmick ahead of general elections in August.

He said Africa’s second-biggest copper producer was experiencing increased investor interest in government securities and renewed confidence in the mining industry.

Glencore will invest over $1,1 billion in Zambia to sink three copper mine shafts with new technology that will extend mine life by over 25 years.

“I am focused on consolidating these gains to ensure that stability and growth increases,” Mr Lungu said. — Reuters.