Kwacha among worst performing African currencies – IMF

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LOOSE fiscal policy on account of widening government over-expenditure is negating BoZ’s significant steps to tighten monetary policy and containing depreciating kwacha, says the International Monetary Fund.
And the kwacha is expected to swing towards marginal depreciation in the short term as the market experiences reduced inflow of dollar from exporters with the currency seen trading between K6.25 and K6.35 against the greenback.
International Monetary Fund (IMF) resident representative for Zambia, Tobias Rasmussen, said the kwacha weakened to be one of the two worst performing currencies in Africa amidst volatility on the backdrop of a drop in copper prices, loose fiscal policy and low international reserves.
“The Bank of Zambia has taken significant steps to tighten monetary policy, including raising the policy rate and reserve requirements for banks,” he said in an interview. “With tighter fiscal policy too, we would expect the currency to stabilise.”
Rasmussen said the IMF was working with the government on designing economic reforms that would comprehensively address the challenges Zambia was facing on the macroeconomic front, covering the fiscal, as well as the external position.
(Source The Post)
We ask what economic surgery they are currently doing apart from poisoning the economy further on the pretext of sustainability?

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