The Zambian Kwacha has been in a sharp slump this quarter a situation that is triggering a rise in inflation in the southern African country, according to Bloomberg.
The Kwacha weakened 12% against the dollar this quarter, its worst performance since the first three months of 2020 when investors bet that Zambia would renege on its debt obligations.
Zambia became Africa’s first pandemic-era sovereign defaulter in November of that year.
The currency’s depreciation is partly due to slow progress in debt-restructuring talks with creditors.
Compared with 9.8% in November, consumer prices rose an annual 9.9% this month, interim Statistician-General Mulenga Musepa told pressmen Thursday in Lusaka.
That’s the highest since September and brings the average for 2022 to 11.1% which is below the central bank’s forecast of 11.3%. The cost of transport exceeded other price increases, Musepa said.
World Bank President David Malpass said last week the delays are impacting economic growth and poverty in the southern African nation. Zambia is seeking to rework $12.8 billion of foreign loans.