• Commitment from Chine to Co-Chair the Creditors Committee on debt has raised confidence levels.
• This has reflected in the Kwacha remaining strong against major convertible currencies.
• The Kwacha is expected to close the quarter strong against the dollar at somewhere around K17.4.

The Kwacha, Zambia’s currency has continued to show some resilience against major convertible currencies, though still faces minimal pressure against the United States dollar.

This is partially because the country imports more than it exports, resulting in high demand for the green back on the interbank market.

According to Financial market players, the increase in demand for the US dollar which has been seen in the last few days, is putting pressure on the local currency and the demand for the dollar has been attributed to importation of petroleum products by Oil Marketing Companies (OMCs).

However, according to Trading Economics global macro models and local analysts’ expectations, the Zambian Kwacha is expected to trade at 17.41 by the end of this quarter.
The Kwacha has opened the market today Thursday 2nd June 2022 trading at K17.10 and K17, on the bid and offer respectively, while it traded at K17.25 on Wednesday June 1st 2022.
And an Economist said China’s commitment to Co-Chair the Creditors Committee on Zambia’s debt has raised confidence levels with regards to prospects of the country’s fiscal stance in relation to the debt restructuring process.
Emmanuel Zulu told Money FM News in an interview that this confidence has reflected in the Kwacha remaining strong against major convertible currencies.
Mr. Zulu explained that the country has had a number of positive pronouncements with regards to increased investment commitments especially in the mining Sector which forms the largest revenue source for Zambia.
“The commitment from Chine to Co-Chair the Creditors Committee on debt has raised confidence levels with regards prospects of the country’s fiscal stance in relation to the debt restructuring process. This has reflected in the Kwacha remaining strong against major convertible currencies. The Kwacha is expected to close the quarter strong against the dollar at somewhere around K17.4,” Mr. Zulu stated.
Mr. Zulu further noted that Copper prices on the international market have remained high which is a development seen to encourage investment and exports, and this is also contributing to the positive performance of the Kwacha.
“Copper prices on the international market are actually at the highest and that has continued for some time and that has helped actually to boost the performance of the Kwacha as well as our export revenue, so I think those are the attributing factors.”
“With the increased investment that has been promised, we hope to see a stronger Kwacha going forward, holding other things constant of course we are aware of the risks that may arise from the Russia-Ukraine War that is still on but with that in mind I think the Kwacha will still show some resilience against the dollar,” he noted.
In the first quarter of 2022, the Kwacha depreciated by 3.7 percent against the United States dollar to an average of K17.76 ngwee.