ZAMBIA TO RETAIN CURRENCY AUCTION, SAYS KAUNDA

  Zambia will retain its foreign-exchange
  auction system despite the suspension of weekly auctions since
  January 24, President Kenneth Kaunda said.
      "We have not run away from the auction. It hasn't been
  abolished at all," he told Reuters in an interview.
      He said the system would be reintroduced after current
  talks with the World Bank and the International Monetary Fund
  and, he hoped, would be backed by fresh foreign aid funds.
      Kaunda dismissed central bank statements the new auction
  system would be used to allocate foreign exchange to private
  bidders but not to fix the exchange rate.
      Kaunda said the auction system had faltered because of the
  government's shortage of foreign exchange to meet demand.
      It was suspended when the kwacha's rapid devaluation and
  strong fluctuations made economic planning almost impossible
  for the government and the private sector, he said.
      Weekly foreign-exchange auctions began in October 1985. The
  kwacha fell from 2.20 to the dollar to about 15 in 16 months.
  In January 1987 the government was more than two months in
  arrears in paying foreign currency to successful bidders, and
  the auction was suspended and replaced with a fixed exchange
  rate of nine kwacha to the dollar.
  

