Stanchart Backs Kwacha Rebasing

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Stanchart Backs Kwacha Rebasing

Posted by AllAfrica on January 30, 2012 0 Comment

Email Print Share 30 January 2012 THE raising of the minimum capital requirement for commercial banks will make the financial sector more resilient to external shocks and stimulate further growth in the economy, Standard Chartered acquirer has said. Standard Chartered Bank managing director Mizinga Melu said the bank was supportive of a highly-capitalised financial sector as this would result in commercial banks having stronger balance sheets to book larger ticket-size assets in Zambia. Speaking during the Chinese New year dinner in Lusaka, the rebasing of the Kwacha will reduce the cost of doing business and bring about investor confidence in the economy. Ms Melu said the rebasing of the Kwacha would result in significant efficiency gains associated with reduced transaction times and elimination of costs of customising financial systems. She, however, said the Kwacha rebasing would not change the value and purchasing power of the currency. “We believe that it will greatly reduce the inconvenience and the risks that are associated with carrying large amounts of money,” Ms Melu said. “We have in the recent past supported policies that are aimed at reducing interest rates in Zambia. We believe that this will stimulate further growth in the economy and will consequently create more wealth and reduce poverty,” she said. Ms Melu said there are other benefits that would accrue to the economy and that, citizens need to be sensitised on the issue. She said it was, therefore, incumbent upon the financial sector player; banks and non-banking institutions, to educate the public on what rebasing of the currency really means to them. Recently, the Government increased the minimum capital requirement for setting up a commercial bank from the current K12 billion to K104 billion and K520 billion for foreign banks. The measure is expected to raise minimum capital requirement for banks which intend to mobilise additional resources to enable banks participate more effectively in the growing of the economy by increasing credit available to the private sector. And Ms Melu said Africa-China trade corridor was set to become one of the most important global economic developments in the future. She said the Africa-China Trade Corridor was a massive opportunity and was now generating new business opportunities and jobs as well as, boosting associated domestic growth and demand. In 2010, Africa-Chinese trade exceeded $110 billion, up from $91 billion in 2009. Standard Chartered’s ability to offer on-shore Chinese Yuan accounts to African corporates gives these companies the urge to facilitate quick and effective trade relations with the Chinese suppliers, buyers and related global customers. Trade between China and Zambia was impressive at more than $2.2 billion in 2010. ” We believe that this figure was higher in 2011 given that the trade and economic partnerships between China and Zambia continue to develop, strengthen, and grow,” she said. Speaking at the same function, Chinese Ambassador to Zambia Zhou Yuxiao said China was keen to continue participating in the economic development of Zambia, especially in the areas of infrastructure development, telecommunications and mining. In a speech read for him by commercial consular, Mr Zhou said trade between Zambia and China had continued to grow through the Africa-China Trade Corridor. Copyright © 2012 The Times of Zambia. All rights reserved. Distributed by AllAfrica Global Media ( allAfrica.com ). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here. AllAfrica aggregates and indexes content from over 130 African news organizations , plus more than 200 other sources , who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica . Powered By WizardRSS.com | Full Text RSS Feed | Amazon WordPress Plugin | Android Forum | Hud Software

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Stanchart Backs Kwacha Rebasing