The Bank of Zambia Governor (BOZ) Christopher Mvunga said that the Central Banked remains resolute to purchase more gold deposits to enhance the country’s reserves. Mr Mvunga explained that BoZ has since purchased 47 kilograms of gold from the Zambia Gold Company Limited, under the auspice of ZCCM Investments Holdings.

He told journalists at a media briefing in Lusaka yesterday that the purchased gold is in the vault of the Central bank. Mr Mvunga emphasized that the purchase of gold is an ongoing process.

“We have so far bought 47 kilogrammes of gold and this is a continuous process. This is being done under the ZCCIMH and it is key to our foreign reserves,” he said.

And BoZ Deputy Governor for Operations Francis Chipimo said the Central Bank will purchase more gold from Kansanshi mines before the end of February. Dr Chipimo further explained that the purchase of gold has just begun, and will go on for a long period of time. In December last year, the Bank of Zambia signed a Gold Purchase Agreement with Kansanshi Mining PLC, a subsidiary of First Quantum Minerals.

BoZ Governor, Christopher Mvunga, signed the agreement on behalf of the Central Bank while, Director of Operations at First Quantum Minerals, Mr Rudi Badenhorst, signed on behalf of Kansanshi Mining PLC. As at end of 2019, the BoZ’s gold holding had risen to 34,000 tonnes from a low of 28,000 tonnes recorded in 1997.

Meanwhile, Zambia has scaled back, postponed or cancelled projects to reduce the country’s debt exposure as it holds talks to secure a programme from the International Monetary Fund, 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 Christopher 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 following a meeting of the monetary policy committee.

The 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.

Mr. Mvunga said annual overall inflation accelerated to a four-year high of 17.6% in the fourth quarter of 2020 from 15.7% the quarter before. Inflation is projected to deviate further from the 6% to 8% target range over the next eight quarters, he said.

The partial easing of COVID-19 restrictions, meanwhile, saw a softer deterioration of private-sector business in the second half of 2020.

“Indicators of domestic economic activity point to a less severe contraction, but weak recovery is projected in the medium-term,” Mr. Mvunga said.

Gross international reserves declined by $117.7 million in the fourth quarter to $1.2 billion, or the equivalent of 2.4 months of import cover, caused mainly by foreign exchange interventions and debt service.