Q FM Africa's Modern Radio
Former Finance Minister Katele Kalumba says the decision by the Bank of Zambia (BoZ) to raise the base lending Rate from 12.5 percent to 15.5 percent is a timely and necessary measure.
Dr. Kalumba says apart from having excessive speculation, Zambia’s money market has been characterized by a considerable amount of externalization of foreign exchange.
He has told Qfm News by telephone that the move should have in fact been taken much earlier than now.
Dr. Kalumba says this does not imply that the central bank is now undermining the Country’s liberal foreign exchange policy.
Dr. Kalumba states that by its formulation, the Bank of Zambia’s role is regulatory and therefore it has to intervene when the money market begins to behave irrationally.
He says as Former Finance Minister, he is still anxious to see what other measures the Central Bank will roll out.
Dr. Kalumba says the measures he thinks the Central Bank can put in place will not only enable it rein in on the inflation rate but also rationalize the exchange rate.