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IMF disburses $189 million to Zambia
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Debtor African countries to benefit, as dollar depreciation to accelerate in second half of 2023 —Report
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China’s exports plunge most in 3 years amid higher interest rates
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The Executive Board of the International Monetary Fund (IMF) has approved for the immediate disbursement of 189 million dollars under the Extended Credit Facility Arrangement. This brings Zambia’s total disbursements under the Extended Credit Facility Arrangement to about 374 million dollars. The facility seeks to support Zambia’s homegrown economic reform plan to restore macroeconomic stability and foster higher, more resilient, and more inclusive growth. IMF Managing Director, Kristalina Georgieva says Zambia has made commendable efforts over the past two years to stabilize the economy, despite the continuation of significant external shocks. Read more: ZNBC
Government has assured the private sector of investment incentives aimed at accelerating digital transformation. Technology and Science Minister Felix Mutati says government has provided tax concessions in order to provide affordable investment to the private sector for the benefit of citizens. Speaking when he visited IHS communication tower in Lusaka, Mr. Mutati indicated that the tax concessions are an incentive to the private sector aimed at helping reduce the cost of materials needed to erect the communication towers. Read more: ZNBC
Zambia has made a key step marking the beginning of formal talks to restructure over US$3 billion of international bonds after entering non-disclosure agreements (NDA) with its overseas bondholders. Reuters reports that this is according to sources who confirmed the development that took place on Wednesday. It is the first time bondholders have signed NDAs, which restrict them temporarily from trading the notes in exchange for non-public information, since Zambia’s 2020 default. The creditor group, advised by Newstate Partners and Weil, Gotshal & Manges, consists of 15 European and United States-based institutions, holding in aggregate around 45 percent of Zambia’s Eurobonds. Zambia has three outstanding dollar bonds maturing in 2022, 2024 and 2027, trading at 52-57 cents on the dollar. Read more: Zambia Monitor
The cost of living for a family of five in Lusaka as measured by the JCTR Basic Needs and Nutrition Basket (BNNB) has increased by K161.52 for the month of June 2023. The Jesuit Centre for Theological Reflection (JCTR) says the BNNB for June 2023 in Lusaka stood at K9, 239.45 compared to the K9, 077.93 recorded in May 2023. In a statement, Tuesday, JCTR Social and Economic Development Programme Manager Muchimba Siamachoka attributed the increase in the cost of living to price hikes in food items such as beans, cooking oil and others. Read more: News Diggers
Bank of Zambia Exchange Rates
Currency | Buying | Selling |
---|---|---|
USD | 18.5289 | 18.5747 |
GBP | 24.2506 | 24.3180 |
EUR | 20.7116 | 20.7702 |
ZAR | 1.0282 | 1.0310 |
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The United States dollar depreciation is expected to accelerate in the second half of this year, reducing the fiscal incidence of external debt servicing for African countries. A latest report by the African Export-Import Bank (Afreximbank) predicted that dollar depreciation would continue and even accelerate in the second half of this year as the downshift in United States (U.S) market yields took hold. The report, released this month, is titled “Africa’s 2023 Growth Prospects: Securing Growth Resilience in a Polycrisis World.” The dollar has weakened after United States Federal Reserve officials signalled the central bank was nearing the end of its tightening cycle. Several Fed officials said on Monday that the Central Bank would likely need to raise interest rates further to bring down still-high inflation, but the end to its current monetary policy tightening cycle is getting close. Read more: Zambia Monitor
According to Prime Minister Mostafa Madbouly, Egypt has inked contracts to sell shares in state assets for a total of $1.9 billion as part of a drive to strengthen the private sector and raise limited hard currency. The share sales are thought to be essential for Egypt’s hopes of alleviating persistent pressure on the Egyptian pound, attracting desperately needed money, and starting economic reforms under a $3 billion IMF loan package. According to Madbouly, $1.65 billion of the $1.9 billion would be paid in foreign currency. By the end of June, the government intended to raise $2 billion through share sales, but due to delays, the value of the pound on the black market has fallen. At the official exchange rate, the pound has lost roughly half of its value versus the dollar since early last year, and inflation is at all-time highs. Read more: Business Insider
China’s exports have plunged the most in three years as higher interest rates worldwide dampen demand for Chinese goods. Chinese exports fell 12.4 percent in June compared with a year earlier, customs data released on Thursday showed. China is the world’s biggest exporter and the latest figures, after a 7.5 percent decline in exports in May, underscore the challenging outlook for the global economy amid rising interest rates. China’s imports in June also declined, falling 6.8 percent, which was more than expected by economists. Central banks in North America, Europe and Asia have hiked the cost of borrowing to bring living costs under control after inflation in many countries reached its highest levels since the 1980s. Read more: Al Jazeera
Stock futures were mixed early Friday morning as investors awaited earnings reports from a slate of big banks. Futures tied to the S&P 500 were down by 0.06%. Dow Jones Industrial Average futures inched lower by 61 points, or 0.18%, while Nasdaq 100 futures ticked up by 0.07%. In regular trading, the S&P 500 climbed 0.85%. The Nasdaq Composite advanced 1.58%, lifted by Nvidia and Alphabet. The Dow added 47.71 points, or 0.14%. Thursday was the fourth consecutive day of gains for the major averages, and marked the highest closes for the Nasdaq and the S&P 500 since April 2022. Read more: CNBC
In 85 trades recorded yesterday 67,292 shares were transacted resulting in a turnover of K109,310.17.Trading activity was recorded in Standard Chartered Bank Limited, Zambeef, Zanaco and ZAFFICO. The LuSE All Share Index (LASI) maintained its close at 8,228.30. The market closed on a capitalization of K76,747,987,007.45 including Shoprite Holdings and K41,965,301,567.45 excluding Shoprite Holdings.