At the same time, we can see rising price pressures in some industrial nations, particularly the United States, which are partly – but not solely – a consequence of the high oil prices gaining greater impact in the production and consumer segments. It is important to monitor whether the slackening tendencies seen in economic activity recently are temporary or more persistent. If we were to see a notably poorer development than we envisage now, such as much lower growth than forecast, the arguments in favour of cutting interest rates would in my opinion take on greater substance. We will be considering all of these factors at our next monetary policy meeting on 20 June. Thank you! BIS Review 37/2005  5
This will go a long way in enabling your customers not only access affordable funds to finance their investment activities, but also make it easier for them to pay back their loans and on time. The key intermediation role of the banking sector in providing finances will remain compromised if the costs of banking remain high. Distinguished Ladies and Gentlemen, as already mentioned, Zambia is currently going through challenging times when commodity prices remain subdued as result of uncertain demand for our main export product, copper. The visible effects of the economic global crisis have been volatilities in the exchange rate and job losses in the mining sector. The Second round effects, if not managed properly, could have devastating effects in our banking industry, especially through some notable deterioration in the personal loans category of the banks’ loan book. It is my expectation that Stanbic Bank Zambia Limited and other banks’ will enhance prudence in their lending activities and strengthen their risk management systems as a way of minimising further deterioration of the banking industry’s loan portfolio. It is also my firm belief that banks will continue to conduct safe and sound practices even under challenging times and therefore help to mitigate the risks that the financial system is currently facing from the adverse developments in the global economy and the global financial system in particular.