Economic prudence, permanent feature, says BoZ
By Business Reporter
THE Bank of Zambia (BoZ) says economic prudence should not only be for purposes of reaching the Highly Indebted Poor Countries (HIPC) initiative completion point.
Governor Caleb Fundanga said issues of economic prudence should become permanent features in the Zambian economic management systems and not only for reaching HIPC targets.
Dr Fundanga was speaking during a Zambia National Broadcasting Corporation (ZNBC) interview on Sunday evening on Zambia’s financial markets.
“There have been pronouncements suggesting as though financial prudence is only for the purpose of reaching the HIPC completion point. We hope that financial discipline will become a permanent economic feature,” Dr Fundanga said.
The central bank chief said entrenched financial discipline in economic management would allow for control of other macro economic variable like inflation and enhance the value of people’s earnings.
Dr Fundanga said while Commercial banks had reduced lending rates following the Central Bank’s decision to reduce statutory reserve ratios, these could be reduced even further.
He said, however, that the Bank of Zambia could not intervene to push lending rates further down but allow for market systems be at play as this had worked elsewhere in other economies.
