The Bankers Association of Zambia (BAZ) says the statistics from the first quarter of 2022 indicate that the market had sufficient liquidity to support the private sector, households as well as calls for bids from government.
This is despite most domestic businesses and the general public complaining of low liquidity “no money in circulation” and reports of reduced demand in the retail sector.
BAZ Chief Executive Officer (CEO) Leonard Mwanza said that in terms of liquidity on the side of commercial banks, there has been sufficient liquidity that has been circulating on the Zambian market.
Speaking in an interview with the Zambian Business Times-ZBT, Mwanza said there has not been a point where banks are short of liquidity to meet their daily obligations or to place with the private sector borrowers as well as to place with the private sector through government bonds and treasury bills.
Mwanza reiterated that the liquidity profile on the market has been sufficient to meet liability obligations as they fall due. “Liquidity, we measure it as the capacity for a bank to pay the owners of the money, to meet their liabilities as and when they fall due and to have sufficient liquidity that they can use to support government intentions to borrow, to support individuals or the private sector to borrow”, he said.
There is a narrative and social media complaints that there is “no money in circulation” with some members of the public blaming the increase in the price of fuel as the main cause of reduced spending power experienced in the retail and informal sector.
There has not been an official statement from the ministry of finance or statistics to back the allegations of low market liquidity.
