cyber security examinations across the industry, following the issuance of guidelines in 2023. financial performance and condition of the sector despite these challenges, the banking sector remained resilient. was adequately capitalised with capital adequacy ratios remaining well above the minimum requirements. the sector continued to generate sufficient income to cover operating costs, fund growth and augment capital. liquidity conditions varied across banks and the bank of zambia instituted relevant support measures to the sector as alluded to earlier. asset quality was satisfactory, however, continued to be a source of concern, and the bank will continue to assess the situation and will institute appropriate measures to minimise disruption to the financial system. thank you

remarks by the governor on the launch of the 2023 banking industry survey report by pwc august 2024 presentation outline introduction state of the local economy liquidity risk cybersecurity financial performance and condition of the sector introduction ▪ the survey is a very useful tool to many stakeholders, including ourselves. ▪ the 2023 report is the eighth edition. we commend pwc for this initiative and we appreciate the cooperation of the respondents. ▪ the 2023 survey report raises a lot of important issues. however, will focus our brief comments on three top issues raised by respondents : o o o state of the local economy ; liquidity risk ; and cybersecurity state of the local economy ▪ will look at the state of the local economy through the lens of our recent monetary policy committee meeting. ▪ the mpc maintained the monetary policy rate at 13. 5 percent. while actual and projected inflation remain elevated relative to the 6 - 8 percent target band, the committee judged that the current monetary policy stance is appropriate. ▪ inflationary pressures have persisted, with inflation rising to an average of 14. 6 percent in the second quarter of 2024 from 13. 5 percent in the first quarter. ▪ persistent depreciation of the kwacha against major currencies and rising prices of food ( maize grain, maize products, and vegetables ) and energy, particularly fuel, due to constrained supply continued to drive inflation up. ▪ these factors remain key risks to the inflation outlook, exacerbated by extended hours of electricity load management, continued geopolitical conflicts and tight global financial conditions. ▪ inflation is, however, forecast to moderate to 12. 7 percent in 2025, albeit higher than the 9. 8 percent reported in the may 2024 monetary policy report. ▪ in the first half of 2026, inflation is expected to average 10. 8 percent. state of the local economy ( cont. ) ▪ the mpc decision further considered the impact of the drought and that of the past successive increases in pr, increases in srr, and the recent reforms in fx market. ▪ in maintaining the pr as opposed to raising it, the committee also considered the impact on financial stability and growth, particularly in 2024, in the wake of the drought. ▪ continued implementation of fiscal consolidation measures and structural reforms remains critical to lowering inflation, maintaining financial stability, and creating growth enabling environment and resilience of the economy against shocks. ▪ to safeguard macroeconomic stability needs concerted efforts and strengthened