Reserves down, Debts up – Bank of Zambia

Bank of Zambia (BoZ) Governor Dr Denny Kalyalya has confirmed that international reserves now stand at less than US$1.7 billion and are at a 2018 low. Whereas in June they stood at $1.82 billion, providing 2.2 months of import cover, by the end of September the figure was down to $1.63 billion as a result of the need to finance debt servicing payments.

Meanwhile, the stock of domestic debt was up to K54.6 billion by the end of the third quarter (September 2018), as compared with K51.9 billion at the end of the second quarter (June 2018). External debt stock was also up, climbing from $9.37 billion to $9.51 billion over the same period.

Writing about fears of a looming debt crisis in Zambia, international publication The Economist recently wrote: “A crisis will be inevitable unless all creditors, China included, give the IMF the backing it needs to chivvy Zambia into getting its finances in order and its economy back on track. Alas, that seems all too unlikely.”