Africa-Press – Zambia. Having successfully shrank the political and democratic space in the country, Mr Hakainde Hichilema is now moving to shrink the economic space. With such a high statutory reserve ratio at 14.5% means more money taken away from commercial banks to lend to customers. It means less money for the banks to provide loans to its customers.
Once credit is scarce, then how will business expand without access to credit? How will start up business commence operations without access to credit? At what price will commercial banks charge for the available money to advance loans?
This measure is a contractionary measure which will result in reduced economic activity. We are at a loss with such pronouncements.
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