• The Kwacha is not performing very well.
• It has been losing its value and might reach K19 per US dollar by the end of this month.
• There is need to put in measures to stop its free fall.
Zambian Kwacha has continued on a weaker trajectory since the beginning of the year.
Early morning saw market players quote the local unit at K18.53 and 18.58 to the dollar, which slowly trailed on the back foot to be pegged at K18.53 and 18.58 per dollar by the close of business on Friday.
And today, the local unit has opened the market trading at K18.41 and K18.78 ngwee.
On the other hand, an Economist has observed that the local currency is likely to reach K19 per US dollar by the end of this month if nothing is done to stop its free fall.
Dr. Lubinda Haabazoka told Money FM News in an interview that the Kwacha has not been performing very well lately as it has been losing its value against major convertible currencies.
Dr. Haabazoka stated that this might push prices of fuel and other goods upwards to cause inflation, hence the need to take the situation seriously and put up measures to stop its free fall.
“The Kwacha is not performing very well, it has been losing its value and if we are not careful it might reach K19 per US dollar by the end of this month. We need to put in measures to stop its free fall because with the Kwacha losing value, it will push prices of fuel and other goods upwards to cause inflation, so this is a situation we need to take seriously,” Dr. Haabazoka stated.
He attributed the persistent depreciation of the Kwacha to less economic activities, as there are very few foreign exchange (FOREX) inflows currently.
Dr. Habazooka advised government to compel the mines to make Zambia as a primary banking centre so that all their resources are kept within the country to help enhance FOREX supply.
“There is less economic activity, imports, there are very few inflows of Forex and that has a negative impact on the value of the Zambian Kwacha. Government should stimulate production, we need to see how we can export more so as to get more FOREX. Maybe compel the mines to make Zambia as a primary banking centre so that all their resources are kept right here in Zambia, probably that would enhance supply of FOREX,” he said.
A local commercial bank expects the Kwacha to remain in bearish territory unless today’s supply flows pick up.