Zambia’s kwacha is the world’s best performer against the dollar last Thursday after the nation won long-awaited approval for a $1.3 billion bailout from the International Monetary Fund.
The IMF announced the funding after 1 a.m. Zambia time. By 3:50 p.m. in Lusaka, the capital, the copper-producing nation’s currency had gained 3.1% against the dollar. It’s at its strongest level since March 10, 2020 — the day before the World Health Organization declared the Covid-19 outbreak a pandemic, sending most developing nations’ currencies into tailspins.
It’s “amazing” to see the deal concluded, given that it’s been many years in the making and a number of different finance ministers under Zambia’s previous administration tried to reach closure, said Simon Quijano-Evans, the chief economist at Gemcorp Capital Management Ltd.
The recently joined East African country in 2020 became the first African nation to default on its foreign debt during the pandemic and has been seeking to restructure external liabilities that reached $17.3 billion last year. Assistance from the IMF is crucial to that process, as is cooperation from Chinese creditors that hold more than one-third of the total.