• The performance of the Kwacha has not been very good.
• Zambian Kwacha is losing value against major currencies.
• This may stop by January and February as mining companies bring back the FOREX.
An Economist says the Kwacha is expected to gain strength against major convertible currencies between January and February, 2023.
Speaking in an interview with Money FM News, Dr. Lubinda Habazooka said the depreciation of the currency may stop as mining companies bring back the foreign exchange (FOREX) to start mining activities for the rain season.
Dr. Habazooka attributed the poor performance of the Kwacha to the importation of fuel, fertilizer, and also businesses and households who are spending towards the festive season.
“The performance of the Kwacha has not been very good because the Zambian Kwacha is losing value against major currencies. Some reasons why the Kwacha has not been performing well include importation of fuel, fertilizer, and also the preparation by businesses and the preparation by businesses and households to spend towards the festive season.”
“We hope that this is going to stop by January and February as mining companies bring back the FOREX to start mining for the rain season. So we hope that the Zambian Kwacha won’t really lose value,” Dr. Habazooka said.
The Kwacha has continued to be vulnerable to the US dollar as it has opened today’s trading session at between K17.01 and K17.34 on the bid and offer respectively.
According to Bank of Zambia, the Kwacha appreciated by 6.6 percent against the US dollar to an average of K16.02 due to positive market sentiments resulting from the approval of the US$1.3 billion of the International Monetary Fund (IMF) on 31st August, 2022.
Bank Governor Dr. Denny Kalyalya recently disclosed that the Central Bank has had to provide US$333.5 million to the interbank market primarily from the mining tax receipts, in order to address underlying volatility and support importation of critical agricultural and petroleum products.