Merlyn Mwanza
Kamfinsa member of parliament Christopher Kang’ombe says it’s alarming that despite the Bank of Zambia (BoZ) spending $1.3 billion to boost the Kwacha, the local currency has depreciated to now trading at over K18 to US$1.
But economist Chibamba Kanyama defended the administration stating that central banks are vehicles for balance of payments for trade purposes, and that reserves exist for such purposes.
In a tweet, Kang’ombe stated: “Bank of Zambia spent $ 1.3 billion (year to date as at November 2022) to keep exchange rate artificial, using money from Mining. Today $ 1= K 18 and kwacha depreciation has continued. If this is the only thing BOZ is doing (flooding market with dollars) then it’s alarming.”
But Kanyama countered: “Good observation. I should, however, state that the central banks are transmission vehicles for balance of payments for trade purposes. The reserves exist for such purposes, to ensure there is always enough foreign currency to enable industry import various products.”
However, Stanley Musonda rebuked Kanyama stating, “I thought you people used to criticise the previous regime for doing that and called it artificial gains but today tables have turned and you are calling it the role of the central bank.”
Another one going by the name Too Bad, too bad tweeted: “But isn’t kwacha stability supposed to be anchored on stable production?”
