Economist Kelvin Chisanga has observed that Zambia’s revised bond market framework introduces a more structured and market-driven approach to foreign investor participation.
In a statement, Monday, Chisanga explained that while foreign investors are now permitted to engage in local currency bonds, their exit from the domestic bond market is not immediate.
He said, instead, they are required to liquidate their holdings through the secondary market, receive proceeds in kwacha, and then source foreign currency through the formal banking system.
Chisanga emphasised that this mechanism plays a stabilising role by ensuring orderly exits and preventing abrupt capital flight.
He, however, cautioned that large or poorly timed exits could still exert pressure on the foreign-exchange market due to increased demand for foreign currency.
Highlighting the recent policy shift, Chisanga noted that encouraging rollovers rather than forced exits helps to smooth capital flow cycles and reduce volatility in the FX market.
He further pointed out that this adjustment enhances financial market resilience, improves liquidity predictability, and supports long-term investor confidence in Zambia’s domestic capital markets.
