Bank of Zambia Highlights Importance of Foreign Reserves for Economic Stability
Zambia Central Bank Says Strong Foreign Reserves Are Key to Managing Economic Shocks and Inflation
Bank of Zambia Governor Dr. Denny Kalyalya has emphasised the importance of maintaining strong foreign reserves, saying they provide a financial cushion during periods of economic uncertainty.
Speaking during a media tour at the Zambia International Trade Fair in Ndola, Dr. Kalyalya said foreign reserves help the country respond to major shocks, including natural disasters, health emergencies and global disruptions that affect supply chains.
He explained that adequate reserves allow Zambia to continue importing essential goods, access alternative supply sources and support overall economic stability during challenging periods.
The central bank governor also said Zambia had achieved its inflation target of 6–8 percent, adding that lower inflation should gradually help ease pressure on the cost of goods and services. He said the Bank of Zambia remains focused on further improving price stability.
Meanwhile, Progress Pezulu, Bank of Zambia Manager for Reserves Management and Financial Markets, said the country’s reserves declined between 2019 and 2020, partly due to fiscal pressures and debt-related challenges.
He noted that reserves began recovering after 2021, supported by factors including the $1.3 billion IMF allocation provided during the COVID-19 period and improved performance in the mining sector following renewed activity at major operations such as Konkola Copper Mines (KCM) and Mopani Copper Mines.
The Bank of Zambia said maintaining adequate reserves remains an important part of strengthening the country’s economic resilience and supporting long-term financial stability.
