Zambia scales back projects to reduce debt exposure – central bank

LUSAKA (Reuters) – Zambia has scaled back, postponed or cancelled projects to reduce the southern African copper producer’s debt exposure as it holds talks to secure a programme from the International Monetary Fund (IMF), the central bank governor said on Wednesday.

Zambia, which became Africa’s first pandemic-era sovereign default late last year, began discussions with the IMF last week and has requested debt relief under a new common framework from the Group of 20 major economies.

“Our understanding is that actions are being taken to scale down and reduce the debt exposure of the country, if not stop it for now,” Bank of Zambia Governor Chris Mvunga told journalists, adding that discussions with the IMF had been “cordial”.

“If I look at the disclosure of the debt portfolio, it’s not moving upwards other than probably existing disbursements. So my reading of that is that the matter is being addressed,” he said.

Zambia’s central bank raised lending rates by 50 basis points to 8.5% on Wednesday, saying it was ready to tighten policy further to tame rising consumer inflation driven by “cost-push” pressures and a sharp depreciation in the currency.

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