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Foreign reserves hit $2.9 billion

By BUUMBA CHIMBULU

ZAMBIA’S foreign reserves have been boosted to US$2.9 billion following the injection of the Special Drawing Rights (SDRs) by the International Monetary Fund (IMF), as the benchmark of lending money in the financial sector has for the second time been maintained at 8.5 percent.

The country last month was allocated US$1.33 billion SDRs by the IMF.

International reserves therefore represents 5.4 months of import cover, according to the Bank of Zambia (BoZ) Governor, Mr Christopher Mvunga.

Mr Mvunga said in Lusaka yesterday that reserves at end of August 2021 rose to US$2.9 billion following the receipt of the SDRs as well as market purchases.

“Gross international reserves rose to US$1.4 billion at end June 2021 from US$1.2 billion at end March 2021,” he said.

Meanwhile, Mr Mvunga announced that BoZ has maintained the monetary policy rate at 8.5 percent for the second time while being mindful of the subdued economic activity and vulnerabilities in the financial system.

He explained that inflation was projected to decelerate faster and edge closer to the target range than was earlier envisaged in May.

Government therefore stressed that implementation of fiscal adjustment measures premised on fiscal discipline, dismantling of domestic arrears, debt restructuring and securing an IMF programme among others remained critical to restoring macroeconomic stability.

Inaction currently stands at 24.4 percent as of August 2021.

“Inflation maintained an upswing trend in the second quarter, rising to 23.5 percent from 22.2 percent in the first quarter.

 “Over the next eight quarters, inflation is projected to decelerate faster than was earlier anticipated although it will remain above the six to eight percent target range,” Mr Mvunga said.

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