Maravi

Global crisis to affect dollar trading – Phiri

Global crisis to affect dollar trading – Phiri
Thursday, October 23, 2008 8:44:39
Written by Gillian Namungala and Allan Mulenga

INTERMARKET Banking Corporation managing director Richard Phiri has said the global financial crisis will affect the cost of financing in dollar terms.

Addressing trainee journalists at The Post Newspapers on Monday, Phiri said the cost of US dollar has increased to about five per cent since the beginning of the global financial crisis.

“What has happened is that the global economic crisis has led to an increase in the cost of US dollar on what we call the London Interbank Offered Rate (LIBOR) where the cost of a US dollar has gone up from 2.3 per cent to about 5 per cent,” he said.

Phiri also anticipated a squeeze in the rate of lending by international banks as decisions could be made at their headquarters not to lend money to the Zambian economy.

“Lending decisions are made at the head offices in Europe so what we will see in the Zambian economy is that local banks that are international will have to cut their lending projections by 30 per cent or 40 per cent to suit with the global directive,” Phiri said.

Phiri further said there would also be a reduction on the amount of donor aid to African countries as a result of the current global financial crisis.

And Phiri urged journalists to undertake business-related courses in order to report effectively on business issues.

Labels: CURRENCY, FINANCIAL CRISIS, INFLATION

posted by MrK @ 8:26 PM