Stanbic Bank optismict of Zambia's Economic Grwoth

STANBIC Bank Zambia has said it is optimistic that Zambia’s economy is on its growth path following fiscal and monetary adjustments by the Government and the Bank of Zambia (BoZ).

And the Bank has reduced its base lending rates by 1.5 per cent, making it one of the banks with the lowest rates in the country.

Stanbic Bank chief executive Charles Mudiwa said the bank was optimistic that the was going through an improved period in its life cycle as a country.

Last week, the central bank’s Monetary Policy Committee (MPC) reduced the policy rate to 12.5 per cent from 14 per cent, and the Statutory Reserve Ratio to 12.5 per cent from 15.5 per cent.

Mr Mudiwa said steps taken by both the Government and BoZ would spur the growth of the economy.

He was speaking during a media briefing on the impact of reduction of monetary policy rate on Zambia’s economy in Lusaka yesterday.

“We are very optimistic that we are going through an improved period in our life cycle as a country and steps taken by both the Government and Bank of Zambia will spur the economy forward and we will see growth coming back into the economy,” Mr Mudiwa said.

He said in line with the BoZ’s reduction of the monetary policy rate, Stanbic Bank announced a reduction in its base lending rates, making it one of the banks with the lowest rates in the country.

Mr Mudiwa said the reduction in interest rates would immediately pass on the benefit to customers and lower the cost of credit thereby increasing economic activity in the productive sectors of the economy and lessening the burden on borrowers.

“As Stanbic, we believe that Zambia is our home and we must therefore drive her growth. The Bank of Zambia has set the benchmark and we must complement the central bank’s efforts by also reducing our rates.

“By reducing our lending rates we are helping our customers grow and helping the country boost the much-needed growth and diversification,” he said.

Mr Mudiwa noted that to further increase money supply, the Statutory Reserve Ratio, which is the minimum amount certain institutions, such as financial entities and insurers must maintain as liquid funds to avoid insolvency and are used to influence liquidity and interest rates, was also reduced significantly.

Stanbic bank head global markets and chief economist Victor Chileshe said the bank was also optimistic that currency would continue to trade between K9/9.5 with bias to appreciate.

Mr Chileshe said the Kwacha could have been much stronger if the BoZ had not been coming in to accumulate reserves.

“We are optimistic that the worst is over and the beauty about it is, now I think previously the issue was that monetary policy had to really compensate for the fiscal side, but now we see that the fiscal side is coming to the party.

“The monetary policy is being adjusted to create that balance and also the collateral damage that came with overly tightening and keeping inflation in check is slowly being eased to allow economic growth to start kicking,” Mr Chileshe said.

He said there was a resolve on the part of Government to bring the fiscal deficit down and walk to recovery path with or without the International Monetary Fund (IMF)