Maravi

BoZ links rise in forex supply to mining boom

BoZ links rise in forex supply to mining boom
By Kabanda Chulu
Friday September 12, 2008 [04:00]

THE Bank of Zambia (BoZ) has attributed the increase in supply of foreign exchange to the good performance of the mining sector and non-traditional exports. According to the second quarterly report covering April, May and June released by BoZ, following the increased net foreign exchange inflows into the market, the kwacha appreciated by 11.3 per cent against the US dollar during the period under review as compared to an appreciation of 4.2 per cent recorded in the first quarter.

"The foreign exchange market was characterised by increased supply from the mining sector, non-traditional exports and foreign portfolio investments and in order to allow the business community to plan with a longer time horizon, BoZ participated in the market to ensure stability," it stated. "In this regard, BoZ purchased US$ 37 million as compared with US$13 million in the first quarter and during the period under review, BoZ also sold US$ 20 million as compared with US$13 million in the previous period."

And copper export earnings declined by 0.1 per cent from US$ 968.2 million in the first quarter to US$ 967.6 million in the second quarter.

But on a year-to-year basis, copper receipts increased by 27.3 per cent from US$ 1.520 billion in 2007 to US $ 1.935 billion in 2008.

Also, Cobalt export earnings declined to US$ 104.4 million in the second quarter from US$ 105.5 million in the first quarter but on year-to-year basis, cobalt receipts increased by 82.3 per cent to reach US $ 209.9 million in 2008 from US$ 115.1 million in 2007.

During the second quarter of 2008, non-traditional exports increased by 12.3 per cent from US$ 167.1 million in the first quarter to US$ 187.6 million in the second quarter and this could be attributed to earnings associated with export of copper wire, burley tobacco and electric cables.

The central bank stated that favourable export earnings have led to the strengthening of the external sector reflected in the appreciation of the kwacha against major currencies on the exchange rate.

This development resulted in a 10 per cent increase in international reserves from US $ 1.216 billion in March 2008 to US $ 1.338 billion in June 2008.

Labels: BOZ, FOREX

posted by MrK @ 3:59 AM