Maravi

Banks are liquid, says former BoZ director

Banks are liquid, says former BoZ director
Written by Fridah Zinyama
Thursday, November 27, 2008 11:55:34 AM

FORMER Bank of Zambia (BoZ) financial director Richard Chembe has assured the business community in Zambia that commercial banks have enough liquidity to continue lending despite the global financial crisis.

And BoZ governor Dr Caleb Fundanga has said there is need to heavily invest in hydropower generation to meet the country’s consumption demands and export surplus power in place of copper.

In an interview, Chembe, who was recently appointed President Rupiah Banda’s economic advisor, said commercial banks had enough liquidity to lend each other and the private sector.

“The banking sector in Zambia is quite liquid and there should not be any concerns about whether the private sector will continue to get loans to invest or recapitalise their businesses,” he said.

Chembe said there was interbank borrowing going on and banks were quickly paying back the loans they were getting from each other.

“All the banks in Zambia are not holding any toxic assets that are linked to the international market,” he said. “If the scenario was different, then we would have concerns on the banks’ liquidity and their ability to continue lending to each other and the private sector.”

Chembe therefore said the international banks operating locally were insulated from what was happening in their countries of origin.

And Dr Fundanga said Zambia has so much water resources that could be used to generate power which is in high demand in the region.

“As a country, we are in need of power but I strongly believe that if we heavily invested in hydropower generation, we would have enough power to meet our needs and have surplus electricity to export,” said Dr Fundanga.

“Even as copper prices keep on fluctuating, we need alternative exports that can earn the country the much needed foreign exchange.”

Labels: BANKING, BOZ, CALEB FUNDANGA, FINANCIAL CRISIS, RICHARD CHEMBE

posted by MrK @ 11:58 AM