Economist attributes poor Kwacha performance to low copper output

• The Kwacha has performed badly against the dollar.
• Its performance has been against what was expected.
• This could be attributed to the fact that the country needed a lot of US dollars to procure agriculture inputs.

An Economist has attributed the poor performance of the Kwacha this year to low copper production which could not support the country’s export base.
Speaking to Money FM News, Partner Siabutuba said another factor that has contributed to the depreciation of the currency this year is the persisted high US dollar demand to facilitate importation of agriculture inputs and other essential commodities.
Mr. Siabutuba noted that the Kwacha has performed badly against the dollar as its inability to stay in one place for a longer time has been an issue of concern.
“The Kwacha has performed badly against the dollar, its performance has been against what we had expected it would perform, but I think that its inability to stay in one place for a longer time was an issue of concern.”
“This could be attributed to the fact that we were in the farming season and we needed a lot of US dollars to procure agriculture inputs. But I think that our export base which should have been supported heavily by copper production could not help matters,” Mr. Siabutuba stated.
He further observed that the temporal measures that Bank of Zambia has put in place, such as tightening its benchmark lending rate and raising the Statutory Reserve Ratio for Banks have not been able to sustain the pressure being exerted on the local unit.
“So I think the temporal measures that Bank of Zambia will have put in place were not able to sustain the pressure that was being exerted on the currency,” he noted.
The local currency has continued losing value against the green back, trading at K25 to a US dollar, as the interbank market continues to face serious supply imbalances amidst strong standing demands.

More From Author

World Bank urges Zambia to capture other benefits beyond mining sector

• World Bank is committed to supporting African countries to translate Africa’s mineral wealth into…

Read More

Kwacha gains should benefit consumers – BuyZed

• This is to ensure that consumers begin to enjoy what is produced locally.• Manufactures…

Read More

SEC attributes decline in Q4 bond trades to delayed debt restructuring process

• One of the challenges is to do with the delays in finalizing the debt…

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

EAZ underscores urgency of addressing pressing economic issues ahead of Summit

  There is need to navigate the economic headwinds with determination, resilience, and a shared…

Read More

Mfuwe International Airport to be temporarily closed for rehabilitation

Mfuwe International Airport infrastructure has recorded marked deterioration. During the rehabilitation period which is expected…

Read More

ZICA calls for recruitment of registered accountants in Councils

Recruitment of registered accountants in local authorities will lead to significant improvements in financial management…

Read More