An Economist says the resurgence of Covid-19 will have adverse effects on the performance of the Kwacha against major convertibles. 

In an interview with Money FM News, Shabdin Mweemba said this is because a lot of business entities will negatively be affected by the pandemic; a situation that will result in reduced production of various goods and in intern weaken the Kwacha against convertible currencies.

Mr Mweemba noted that with the reoccurrence of the pandemic, the local unit is not expected to gain strength against major convertibles any time soon.

He added that looking at how the currency has been trending in the first week of January, it can be seen that the Kwacha has continued to lose value against the convertibles.

“From the trend that has already been set this first week of January it can be seen that the Kwacha has continued to lose value and the coming in of the pandemic will result in the closure of most business a situation that will even impact on the kwacha more,” he said.  

And Mr Mweemba has commended the Bank of Zambia for the initiative to reserve gold so that in in the long term they may sell the gold and off load the foreign currency on the market.

“We commended the central bank for saving gold, because in the long term basis the country will see an improvement and in such times they can sell the gold and offload the currency,” he said.