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Kwacha performance has been strong this year – Economist

• The performance of the Kwacha this year has been on the strong side as compared to last year.
• This has been seen from the high annual appreciation rate averaged at 23% against the dollar in July 2022.
• Today the Kwacha is trading around K16.4 against the Dollar, almost K5 less compared to last year this time.

The Zambian Kwacha experienced stability in terms of exchange rate against the United States dollar in the first half of 2022 compared to the same period last year.

According to Financial market players, the Kwacha appreciated by over 3 percent in July 2022 from an average of K17.02 per US dollar to K16.45.
This is mainly on account of the continued intervention by Bank of Zambia to supply Foreign Exchange in the market and the positive market sentiments regarding national debt relief restructuring.
And an Economist observed that this year, the Kwacha’s performance has been positive compared to last year, as seen from the high annual appreciation rate averaged at 23% against the US dollar in July 2022.
Speaking in an interview with Money FM News, Emmanuel Zulu noted that the Kwacha was highly stressed in 2021, which was a period when the country was still trying to recover from the devastating effects of the Covid19 –pandemic amidst macro-economic instability and huge debt service burden.
Mr. Zulu stated that towards the August 2021 general elections, fiscal deficits arising from huge Capital expenditure saw the Kwacha reach its weakest point to trade at over K21 against the US dollar, despite the Monetary Policy interventions that were implemented by Bank of Zambia.
“Today the Kwacha is trading around K16.4 against the Dollar which is almost K5 less compared to last year this time,” Mr. Zulu noted.
He attributed the gain to reduced demand for the US dollar or increased supply of the greenback on the interbank market.
Mr. Zulu reiterated that External factors such as volatility of international oil market prices and fluctuating copper prices on the London Metal Exchange still remain risks to the stability of the Zambian kwacha.
“Positive commitment towards the achievement of macroeconomic stability as seen from the attainment of a single digit inflation rate last month and also the strengthened efforts towards fiscal consolidation remain the key factors influencing the performance of the Kwacha,” he added.
As of 2nd August 2022, the current exchange rate of 1 US Dollar is equal to 16.34 Zambian Kwacha, representing a decrease of -14.95% compared with the same time last year, when 1 US Dollar equaled K19.22 Ngwee.

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