The road CBK took was a bit bumpy in that it accepted to live with some exchange rate volatility in the hope that they would soon soften once global banks started trading with each other. The current trend in imports and exports is expected to be sustained in 2009 with the current account deficit expected to widen.
This deficit will be financed by capital and financial inflows as has been the case in the last few years. We are taking a cautious view on private capital flows. We will monitor the current account and the deficit to ensure its sustainability. But so far, most imports have been inputs and machinery equipment – so signalling firm growth and expansion in the future.