Zambia’s president Edward Lungu has commended the country’s central bank for the measures it has put in place to handle the exchange rate turbulence that has helped the Kwacha recover marginally to the dollar. In a statement, the president expressed full confidence in the current leadership of of the central bank .
The bank of Zambia raised interest rates by 300 basis points to 15.5 percent in November in a bid to curb inflationary pressures, but left them on hold in February, citing concerns about slowing growth. Following the rate hike, the Kwacha recouped some losses but came under renewed pressure after credit ratings agency Moody’s earlier this week, downgraded Zambia’s rating to a B3 with a negative outlook.
Zambia’s government in the past has criticised politicians and analysts who have dismissed the Kwacha’s recovery as a political gimmick ahead of general elections in August. Zambia is Africa’s second-biggest copper producer, and is facing a myriad of challenges, from an electricity shortage to depreciating copper prices that have threatened output on the mining industry, jobs and economic growth.