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The foreign reserves situation has kept on improving since the opening of this year’s tobacco selling season on March 24th.
According to Reserve Bank’s Website, the levels slightly grew from 475 million United States Dollars as at 20th March about 2.53 months import cover to 481 million United States Dollars as at mid April, an equivalent to 2.56 months import cover.
However, the figures remain shy from at least 585 million United States Dollars or three months import cover and above.
This is attributable to the inflow of Dollars in the auctions.
Reports have since indicated that the central Bank has taken stapes in buying the excess forex in a bid to build enough reserves that would in a short to medium term stabilize the local currency and then inflation.
In a related development, Liquidity levels have tremendously improved to average K20 billion a day from a daily average of K11.2 billion in the previous week.
This has expectedly reduced borrowing between banks which averaged K1.5 billion per day, last week, decreasing fromK 1.8 billion per day in the previous week.
The improvements in bank’s capacity to have some cash coincided with politicians’ official campaigning period which runs between 20th March and a day before the polling year’s 20th May.
Economists predicted that the campaigning period will improve cash circulation due to politicians’ cash splashing campaign.
