In a statement to the general public, the Bank of Zambia Governor, Michael Gondwe, announced the Kwacha appreciation to its equilibrium level of ZMK 6.1 per USD dollar, noting the success of the Bank’s tightened monetary policy that was instituted in May 2014.
According to the statement, measures taken by the Bank of Zambia such as the increase of the Bank’s rates and of the statutory reserve ratio, managed to contain inflation, prevent further depreciation of the Kwacha, and maintain a strong economy.
Due to the temporal necessity of these measures, they are likely to be scaled back upon the Monetary Policy Committee (MPC) meeting to be held in August 2014.
“It was our view that the measures we have taken to restore stability in the financial sector are temporary and will be scaled back when it gets more evident that the threats to higher inflation have receded,” reads the Governor’s statement, “This will be done in a measured way to ensure that we do not see a return to instability in the financial markets that we witnessed earlier in the year.”
Since May 2014, following the record-low depreciation of the Kwacha, the Zambia currency has regained 14% from over ZMK 7 per USD to the current rate of ZMK 6.1.
According to a statement released by the Bank of Zambia, the Zambian economy remains strong with growth projects to surpass 7% by the end of 2014 and inflation rates expected to be maintained at 6.5%,