President Edgar Lungu renewed the contract effective February, the Bank of Zambia said in a statement.
The contract renewal will see Dr. Kalyalya, who was first appointed in 2015, oversee the nation’s monetary policy until at least 2023.
The only other governor to serve longer was Caleb Fundanga between 2002 and 2011.
Bloomberg reports that investors will probably welcome the move as Dr. Kalyalya was seen as a steadying hand at the central bank, not afraid to criticize the government’s loose fiscal policies at times.
He led the institution through one of the most turbulent economic periods in the country’s history after a power crisis and a collapse in copper prices prompted Zambia’s currency to drop by around 50 percent the year he took over from Michael Gondwe.
Economic growth slowed to 2.9 percent, the lowest this millennium, and inflation raced to more than 20 percent.
Dr. Kalyalya’s monetary policy committee responded by raising the central bank’s key lending rate to 15.5 percent, and held it there until early last year before cutting as inflation slowed to 6.1 by December. Price growth quickened to 7.4 percent in April, the same level as when Kalyalya was first appointed, and the MPC kept its benchmark rate at a four-year low of 9.75 percent this week.
One of Kalyalya’s key challenges will be increasing international reserves, which have dropped to $1.8 billion, the lowest in almost eight years, as the government grapples with increasing costs to service ballooning external debt.
Zambia’s kwacha has depreciated 2.1 percent against the dollar this year, and was at 10.185 by 7:44 a.m. in Lusaka Friday.