"Zambia inflation nears two-year high as currency slides"

" Zambia inflation nears two-year high as currency slides \r\n\r\nZambia\u2019s annual inflation rate rose to an almost two-year high amid the ongoing depreciation of its currency, piling pressure on monetary policymakers to act when they meet next month.\r\n\r\nThe consumer price index jumped to 13.2% in January, compared with 13.1% the month before, Statistician-General Mulenga Musepa told reporters in Lusaka, the capital, on Thursday. Monthly inflation quickened to 2.1%, the fastest pace in a year.\r\n\r\nThe kwacha has weakened around 34% against the dollar since July and is among the world\u2019s worst performing currencies so far this year, despite various policy measures to halt its slide.\r\n\r\nThey include introducing new regulation from Jan. 1 requiring exporters to have accounts domiciled in Zambia to get paid for their exports, raising interest rates by 200 basis points last year to 11% and increasing the reserve-ratio requirements for lenders several times.\r\n\r\nThe slump in the currency is being stoked by lower copper production, the southern African nation\u2019s main foreign-exchange earner, and weaker metal prices.\r\n\r\nA standoff among its creditors that\u2019s stalled efforts by the continent\u2019s first pandemic-era sovereign defaulter to restructure its debt has also contributed.\r\n\r\nPersistent inflation and relentless currency weakness may persuade the Bank of Zambia\u2019s monetary policy committee to lift the benchmark rate for a fifth time in a row when it gives its decision on Feb. 14.\r\n\r\nThe main driver of the uptick in inflation was non-food price growth. It accelerated to 12.4%, compared with 11.6% in December. Food inflation, likely due to seasonal factors, eased to 13.7% in January from 14.2% last month, Musepa said."

"Zambia inflation nears two-year high as currency slides"

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