Exactly 13 months after being laid off as central bank governor, Dr. Denny Kalyalya has bounced back as monetary policy head at the Bank of Zambia (BOZ). This follows a press release from state house confirming his appointment on September 27.
Kalyalya’s contract was terminated the Saturday of August 22, barely 3 days after the penultimate rate decision meeting of 2020 that cut rates 125bps to the lowest ever at 8% and was replaced by former Christopher Mvunga, a certified accountant and former commercial banker. This decision was seemingly not received well by a subtle statement from the IMF expressing concern about the need for predictable monetary policy stability and the need for central bank independence especially in fragile times as Zambia was in.
Kalyalya is one of Zambia’s most objective governors that demonstrated independence in the most difficult era amidst economic turbulence and was consistent in flagging fiscal dislocation from monetary policy. This was established in the monetary policy communiques at every rate decision meeting he chaired.
STILL FOUND HIS FEET AT THE WORLD BANK
Barely eight months after exiting the central bank Kalyalya was named Co-Chair of the International Development Associations twentieth replenishment (IDA20) by donor and borrower country representatives of the World Banks special wing set to launch in April 2021. Kalyalya served as Executive Director at the World Bank prior to his appointment as BOZ governor.
Kalyalya’s appointment comes at a critical time when Zambia’s fiscal position remains fragile amidst widened debt and dislocated monetary policy. In the labyrinth of a debt restructure, quest for an IMF deal and appetite for economic recovery, monetary policy stability will remain critical. Until his appointment, Deputy Governor Operations Dr. Francis Chipimo was acting governor after Christopher Mvunga’s resignation earlier in the month.
The Kwacha Arbitrageur