In the week beginning April 16, the Kwacha has extended its sprint with a 3.9% rally. This winning streak, claws back part of the earlier 122 days losses from market fatigue in the wake of a delayed debt restructure. Ahead of a creditors meeting on Tuesday April 17, the copper currency traded bullishly as corporates continued to offload Dollar holdings, a behavioral move that continues to give the Kwacha a positive cue.
During the IMF and World Bank Spring sessions in Washington, it was established that China’s change of stance on having multilateral development banks have a share of haircut losses as part of the debt restructure discussion meant that the stale mate in creditor negotiations could see the G20 common framework yield the desired results finally.
With the Southern Africa nation in the labyrinth of debt reorganization that has delayed, a breakthrough in restoration of fiscal fitness could be likely eminent. World Bank President David Malpass hoped that creditors would provide assurances as early as the next coming weeks. On an IMF extended credit facility approved 30 August 2022, Zambia is due for its second tranche of $188 million after a Staff Mission IV team completed a review. Creditor assurances are a prerequisite for disbursement of this second tranche for Zambia. The copper producer is one unique casing point after being the first dollar bond default in COVID pandemic era.
The Southern African nation has continued to radiate democracy to the world with the most political shift in August in 2021 that saw ascension to power of Hakainde Hichilema show strong political will to restore fiscal fitness. Zambia remains a darling to most international partners ranging from multilaterals to nations evidenced by the level of attention it has received. The red metal producer was recently courted by the US Vice President Kamala Harris, US Treasury Secretary Janet Yellen shortly after the IMF Managing Director Kristalina Georgeiva and the World Bank Chief Finance Officer Anshula Kant visited.
As at close of business in the capital Lusaka, the Kwacha closed trading at 17.44/USD.
