Maravi

Musokotwane hopeful over copper prices

Musokotwane hopeful over copper prices
By Chiwoyu Sinyangwe
Fri 28 May 2010, 07:30 CAT

FINANCE minister Dr Situmbeko Musokotwane is optimistic that the Greece debt crisis, which depressed international copper prices and caused fluctuations in the local foreign exchange market, seems to have been contained.

Recently, copper prices fell on concern that a widening debt crisis in Europe would derail the global recovery and curb demand for raw materials. Almost US $1 trillion of worldwide equity value was erased on April 27 on concern that the government budget deficits would spur defaults.

On the other hand, Bank of Zambia (BoZ) governor Dr Caleb Fundanga said the recent dip-in form of kwacha against major convertibles on the local foreign exchange market was owing to offshore investors exiting the local market for safe havens on fears that the Greece debt crisis might spread to the rest of the global markets.

According to the Zanaco Daily Treasury Newsletter, the kwacha experienced a lot of turbulence in recent sessions, forcing market players to trade cautiously as they look for direction.

Zanaco stated that in the short to medium-term, the kwacha is likely to remain trading between K5,000 and K5,150 for bid and offer.

In an interview, Dr Musokotwane said things should come down after the European Union (EU) and International Monetary Fund (IMF) agreed to a rescue package for the troubled Greece economy.

“My positive sentiments arise from the fact that…the press reports when it was reported that the European Union have now approved funding package for Greece,” said Dr Musokotwane.

“In other words, Greece now will be able to borrow money within the EU and manage to pay off the bond holders – people who bought their bonds. So, an eminent debt crisis or debt failure for Greece is not foreseen now therefore things should come down.”

The EU and IMF agreed on a US $146.2 billion bailout package over three years to rescue Greece’s indebted economy.

Finance ministers from the 16 nations that use the Euro currency on Sunday endorsed the plan after the Greek government announced a series of budget cuts and tax hikes.

Under the rescue plan, the EU would provide US $106 billion and the IMF would provide the rest.

Labels: CALEB FUNDANGA, KWACHA, NEOLIBERALISM, SITUMBEKO MUSOKOTWANE

posted by MrK @ 2:59 PM