September 29, 2011 / 12:27 PM / 7 years ago

Zambia's cbank governor says contract terminated

Zambia's Central Bank Governor Caleb Fundanga gives a briefing on monetary policy implementation and its outcomes in the first quarter of 2010 in Lusaka May 13, 2010. REUTERS/Mackson Wasamunu

LUSAKA (Reuters) - New Zambian president Michael Sata has fired respected central bank Governor Caleb Fundanga less than a week after taking office, a move that is unlikely to go down well with foreign investors in Africa’s biggest copper producer.

Fundanga, who still had six months to go on his contract, according to Citibank, informed his staff of his dismissal in an email obtained by Reuters.

“This serves to advise you all that my appointment as governor of the Bank of Zambia has been terminated with immediate effect,” he said in the memo.

Citi said the dismissal of Fundanga, who had been central bank governor since 2002 and was renowned for his openness with foreign analysts and investors, may set alarm bells ringing about those worried about shifts in policy under former opposition leader Sata.

“We are concerned that this surprising announcement may signal that President Sata wants a quick change in monetary policy in Zambia, bearing in mind that his party has been very critical of high interest rates,” Citi said in a note.

“Although it remains to be seen who the new BoZ Governor will be, we are worried about a drastic and too quick a shift in monetary policy in Zambia.”

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