Maravi

Crisis in Greece to affect kwacha

Crisis in Greece to affect kwacha
By Gift Chanda
Fri 01 July 2011, 04:00 CAT

UNCERTAINTIES in the Greek economy will lead to volatility in the Zambian financial market, says a South African business consultant. Ebrahim Takolia, an advisor at Deloitte Consulting firm, said the local financial markets are expected to be negatively impacted with what was happening in Greece.

He said the kwacha would experience strong volatility as long as the “crisis” in Greece is not resolved. The kwacha yesterday traded at US $4,853 and US $4,873 for bid and offer respectively.

“Volatility in the kwacha-dollar exchange rates is expected to continue because of what is happening on the global arena. What is happening in Greece will continue to affect other counties like the US and this will spill to Zambia too,” he said on Wednesday during the Access Bank organised Economic Review and Trade Finance seminar.

Meanwhile, finance minister Dr Situmbeko Musokotwana said Zambia would attain the projected inflation rate this year contrary to fears by the Bank of Zambia.

He said the country’s record harvest should ease inflation.

The country’s headline consumer inflation edged up in May after easing in April on a slight food price increase.

Annual inflation quickened to 8.9 per cent in May from 8.8 per cent in April.

The government has an inflation target of seven per cent by the end of the year but the central bank recently expressed fears on attaining the target.

They said the preliminary assessment indicate that there are challenges in meeting the target.
“I do not expect much increment in inflation rate because we have plenty of food,” Dr Musokotwane said.

“We are confident that we will get the targeted inflation rate or we will come close to it.”

Dr Musokotwane further dispelled fears of farmers not benefiting from the much celebrated record maize harvest.

He said maize exports into neighbouring countries were going to increase and farmers would benefit.
“Currently we are exporting to Congo DR, I think Namibia also is interested, the Kenyans are also short of maize this year so they are all looking at us for exports,” said Dr Musokotwane.

Zambia has struggled to export maize to neighboring markets partly because its maize is expensive compared to other countries in the region.

Key stakeholders have called on the government to implement measures that would reduce the cost of producing maize.

Labels: INFLATION, NEOLIBERALISM, SITUMBEKO MUSOKOTWANE

posted by MrK @ 5:07 PM