caleb m fundanga : media relations and the bank of zambia – a healthy interaction speech by dr caleb m fundanga, governor of the bank of zambia, at the official opening of the bank of zambia 12th media seminar, ndola, 5 october 2007. * * * • the chairperson • distinguished journalists • invited participants • ladies and gentlemen on behalf of bank of zambia and indeed my own behalf, i am pleased to welcome you all, to this bank of zambia sponsored annual seminar, which is the 13th in the series. further, it is also my great pleasure to welcome you to the city of ndola. ladies and gentlemen, as it is normally the case, some of you are participating for the first time. for those of you that are participating for the first time, let me inform you that this is your seminar and i urge you to participate freely and effectively. i know that your friends who have participated in the seminars before, will agree with me that, every year that we meet at such a forum, we meet as “ partners ” and it is certainly in the interest, of not only us gathered here but the nation at large that this spirit is exhibited through out this seminar, and beyond. in fact, let me thank the media for having embraced this partnership and worked towards maintaining it. the bank of zambia - media relations have been quite healthy, partly due to annual interaction through media seminars. let me reiterate facets of the media namely, education and information to which the bank of zambia attaches a lot of importance, and forms the guiding principles for the formats of all media seminars organized by the bank. we in the bank believe that an effective or indeed a well informed media is key in the country ’ s development efforts. it is in this regard that the bank will continue to work towards the provision of quality information and / or education to the media as evidenced by the continued holding of such seminars coupled with quarterly media briefs. such efforts as you may be aware are not for our own interests but the zambian stakeholders. this is as it should be. distinguished journalists ; may i humbly urge you, to actively participate in the deliberations of this seminar. let me hasten to mention, particularly to those of you that are participating for the first time that you may not be able to completely grasp the materials that will be presented during the seminar. this must not discourage you, as you are free to make followups with the respective departments ( and indeed officers

1. 2 percent at 2017. while the transitory impact of the sharp drop in the oil price between the middle of 2014 through early 2016 should be duly recognised, it remains the case that the level of aggregate demand remains subdued and the cumulative record of below - target inflation in recent years may also exert an adverse influence on the formation of inflation expectations. in addition, the assessment of the governing council is that risks to the growth outlook remain tilted to the downside, especially in relation to external developments. taken together, these factors require continued close monitoring and analysis in assessing the likely future path for inflation and output. let me make a couple of points about the design of the policy package. first, it should be understood that there are significant complementarities among the different individual elements. most directly, the tltro - ii programme directly connects the funding of banks that meet the net credit growth targets to the deposit rate. the negative deposit rate reinforces the asset purchase programmes, with lower short - term rates further raising demand for longer - term securities. 6 in addition, even if the banking system collectively must hold the extra liquidity created by the ecb ’ s accommodative conventional and unconventional monetary policies, the negative deposit rate provides an incentive for individual banks to recycle liquidity holdings through increased interbank lending, expanded lending to the real economy and the purchase of longer - term securities ( praet 2016 ). second, a proper assessment of the overall contribution of the negative deposit rate facility to the policy package should be comprehensive in nature. 7 an important component in this assessment is the impact of the negative deposit rate on the health of the banking system, especially in view of the feedback mechanism by which the current level of bank profitability may influence future credit growth through its impact on bank capital, both directly and indirectly through any impact on the market equity value of banks. of course, those banks that hold excess reserves face a direct cost from the negative deposit rate. in addition, to the extent that banks cannot pass through the lower rate to all types of depositors, the net interest margin of banks is also compromised if competitive pressures mean that lending rates fall by more than deposit rates. that said, in the other direction, banks benefit from lower wholesale funding costs and the improved ability of customers and sovereigns to service existing debts, while also booking capital gains on holdings of fixed - income securities. the importance of the cash flow channel is 2 / 5 bis central bankers '