Zambia’s foreign exchange reserves are at the lowest ever at less than $300million, according to Ministry of Finance and Bank of Zambia informers.
While the government wants Bank of Zambia to intervene and pump the foreign reserve to prop up the free falling Kwacha, Bank of Zambia officials are arguing that it’s better to let the Kwacha fall than default on debt servicing that is due in October 2018.
BoZ officials are further arguing that even if they released the little remaining reserves, the situation won’t help as people will just buy the dollars and keep it for speculative purposes.
Sources further revealed that Zambia could face massive fuel shortages as resources for importing fuel have completely finished.
“What has been happening is that the country has been importing fuel using Letters of Credit (LoC) but now lenders have no more confidence in the Zambian economy and they can no longer offer Zambia credits on importation of fuel”, sources have revealed.
Most likely by October, the country may face crippling fuel shortages.
The Watchdog understands that government may increase the price of fuel.