Indebted nations that have faced lengthy negotiations with creditors need to have access to faster sovereign debt restructuring mechanisms, the International Monetary Fund’s first deputy managing director Gita Gopinath said on Friday.
Gopinath told a conference in Cape Town, South Africa, that she was more hopeful about debt restructuring after Zambia reached a deal with its official creditors, but added that more needed to be done.
“I … felt hopeless about this until two to three months ago,” she told the event, organised by the South African Reserve Bank (SARB). “But after Zambia’s debt restructuring … I’m feeling more hopeful that there is actually a way we can have more faster and timely debt restructurings done.”
She said she was completely in agreement that the world’s financial architecture needed to change and that China’s slowing economic growth had implications for export earnings in South Africa. China is South Africa’s largest trading partner.
SARB Governor Lesetja Kganyago told the conference that inflation expectations in the country remained elevated.
“The most recent figure (of inflation) is 4.7(%) and there is all sorts of excitement (that) we have conquered this monster that is inflation and … my message is the job is not done,” Kganyago said.
Moves in the rand exchange rate, uncertainty surrounding oil prices and the impact of domestic power cuts on economic activity all remained inflationary risks, he said.
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