- Mr. Speaker, Sir, in order to be consistent with the attainment of macroeconomic objectives for 2001/02 fiscal year, a tight monetary policy stance was to be followed. Accordingly, money stock was to grow by less than 17 percent in 2001.
- The performance of the monetary program during 2001 was, however, not as expected. Money stock grew by 21.2 percent, an increase of 4.2 percentage points from the program target. The slight increase in money growth was due to increased borrowing by Government. Therefore, Government's total domestic borrowing increased substantially from K4.3 billion in June 2001 to K13.5 billion in April 2002. This level of borrowing was attributed to the non-disbursements of donor funds, coupled with the lower than budgeted domestic revenues.
- The country’s international reserves declined from 4.4 months of import cover at the end of 2001 to 3.1 months by March 2002. The situation was explained by speculation fuelled by the continued non-disbursements of donor funds. The import cover has since May 2002 risen to 3.8 months.
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