Bank of Zambia Governor says the Central Bank will not print any Money for elections because elections are not a commerce activity but a constitutional activity.
Speaking during the Policy Monetary Announcement Christopher Mvunga says commerce and trader needs to be backed by economic activities in order to increase money supply in the system.
Mr Mvunga said that it is the role of the bank to ensure that there is sufficient liquidity at any given time to support economic activities happening.
“You just don’t sit and print money where there is no opposing value or economic productivity happening,” Mr Mvunga said.
“For example when you bring in worn out and tone old notes, the bank prints the new notes in order to replace the old notes.”
Mr Mvunga said the Central Bank what’s to see to it that there is financial stability in the Country, hence this is the more reason that the central bank leads money to commercial banks if there is no money in the economy in order to support economic activities.
“The Central bank will only print money at any given time supported by commerce and trade,” he said.
And the Bank of Zambia governor says the Monetary Policy Committee (MPC) has maintained the Monitory Policy Rate at 8 percent.
Mr Mvunga said the committee decided to maintain the rate because either increasing or reducing the rate would have had negative impacts on the economy.
He said the committee considered the fact that increasing the rate with the slow pace of the economy and the contracting of businesses would affect the economic situation in the country.
The Governor mentioned that the committee also considered the fact that reducing the rate would put demand on the access of loans as this would go up.
He further said domestic economic activities indicate some improvements.
Mr Mvunga also said Zambia’s economic growth is expected to contract at 4.2 percent and economic growth is expected to recover weaker base.