• There is a slow-down in depreciation compared to last month.
• For the month of September the depreciation was 5 percent and in October the rate is at 0.24 percent.
• This is due to the Treasury bill auction held on 7th October, 2021.
Centre for Trade Policy and Development (CTPD) says there has been a slow-down in the depreciation of the Kwacha this month compared to September, 2021.
Speaking in an interview with Money FM News, Centre Head of Research Boyd Muleya noted that the depreciation rate reduced to 0.24 percent this month from 5 percent in September 2021.
Mr. Muleya attributed the slower weakening rate to the Treasury bill auction held on 7th October 2021.
“For the month of September, the depreciation was 5 percent and so far in the month of October the depreciation rate is at 0.24 percent, so there is a slow-down in depreciation compared to last month.”
“As we know we had an auction on 7th October 2021 and that was on treasury bills, meaning that it had an effect in terms of the Kwacha appreciating because it had gone to K17 as at 1st of October. But getting into the 7th of October when the auction was done, we see that by the 11th which was last week, the Kwacha had appreciated,” Mr. Muleya said.
He however said the Kwacha has this week started showing signs of depreciation, as the effect of the Treasury bill auction is going down.
Mr. Muleya advised government to start putting in place long term measures that will sustain the performance of the currency.
“As experts we recommended that the government should start putting in place measures that are more long term to sustain the performance of the currency. Getting into this week, the Kwacha has started showing signs of depreciation once again, I think the effect of the Treasury bill auction on the 7th of October is wallowing down.”
“But then there is hope this week because on the 21st of October, we are going to issue another Treasury bill auction which would actually help the Kwacha end on a good note. We have seen the kwacha trading around K16.09 somewhere there so we might not go beyond K17,” he stated.
Some commercial banks in Lusaka have quoted the local unit at K16.87 ngwee K17.20 respectively.