CENTRAL BANK DOWNPLAYS 2011 POLLS NEGATIVE EFFECTS ON ECONOMY

The Zambian Central Bank says that the announcement of the date for tripartite elections will not slow down economic activities or affect the performance of the Kwacha but will trigger more business activities.

The Bank of Zambia has said this in contrast to Standard Chartered Bank which predicted depreciation of the Kwacha against the US dollar following the announcement of the election date.

Central Bank of Zambia Governor, Caleb Fundanga has said in the capital, Lusaka, that the economy and currency will remain stable during elections because a lot of economic activities are expected to take place.

Dr Fundanga says the supply of US dollars on the market is dependent on exports and not elections, saying trade will continue even during the election period.

He has attributed the slowdown in economic activity and subsequent depreciation of the Kwacha experienced in 2008 to the global credit crisis and the elections.

But international bank, Standard Chartered Bank head of global markets, Stanley Tamele says the Kwacha is likely to trade at around K4,900 and K4,950 during the election period because of the political risk aversion associated with the election period.

Mr Tamele said historically, when Zambia and other African countries go to the polls, there is a tendency of people and companies holding on to their transactions until after elections.