Economist attributes slight Kwacha gains to low US dollar demand

• This is resulting from a number of sentiments especially around the country’s debt restructuring.
• Bank of Zambia has been intervening to try to ease the volatility of the Kwacha.
• Plans by the BRICS to come up with its own currency can send negative shivers on the foreign exchange market.

An Economist has attributed the slight appreciation of the Kwacha to low US dollar demand arising from a number of sentiments especially around the country’s debt restructuring and some of the interventions by Bank of Zambia such as selling dollars to the market.
Speaking in an interview with Money FM News, Emmanuel Zulu said plans by countries such as Britain, Russia, India, China and South Africa collectively known as the BRICS, to come up with its own currency to try and minimize the demand for the US dollar can send negative shivers on the foreign exchange market regarding demand for the greenback.
Mr. Zulu also noted that the recent Visit to Zambia by US Vice President Kamala Harris may have had some effects on the positive performance of the Kwacha but that this is something that needs to be observed over time in order to arrive at a conclusion.
“The slight appreciation of the Kwacha is due to low demand for the US dollar arising from many sentiments especially around the debt restructuring and also some of the interventions of the Bank of Zambia. It has been intervening to try to ease the volatility of the Kwacha.”
“So they are a number of factors that can speak to the depreciation of the dollar against the Kwacha especially within the country where we have strong statements around the debt restructuring deal, but it’s something that we need to observe over time for us to arrive at a conclusion because just one instance of gain, cannot be something that we can stand by to say the Kwacha is now getting on a positive trajectory,” Mr. Zulu stated.
He further said it is gratifying to note that the Kwacha has shown some positivity and hopes the trajectory can be sustained for a longer period of time.
The local currency has posted some positive gains and is currently trading between K19.97 ngwee and K20.36 ngwee from an average of K21.

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