Economist expects Kwacha to gain towards end of January

• The Kwacha normally gains as the festive season finishes due to less demand for goods and services.
• During the harvest period, dependence on imported food and other products reduces and as people start exporting, forex starts flowing in.
• If the Kwacha does not appreciate towards the month end of January up to August, then there is something fundamentally wrong.

An Economist says the Kwacha is expected to start gaining strength against the US dollar towards the month end of January, 2024, as the festive season comes to an end.
Speaking in an interview with Money FM News, Dr. Lubinda Haabazoka noted that the Kwacha normally gains as the festive season finishes due to less demand for goods and services because most people do not have money.
Dr. Habazooka also stated that during the harvest period, dependence on imported food and other products reduces, and as people start exporting, foreign exchange (forex) starts flowing in, while the mining industry also starts bringing in their monies in preparation for increased mining after the rainy season, thereby strengthening the Kwacha.

“The Kwacha normally gains as the festive season finishes. Demand for goods and services reduces after the festive season because people do not have money. Then you start having harvest, dependence on imported foods and other products reduces, people start exporting so FOREX starts flowing in, the mining industry also starts bringing in their monies in preparation for increased mining after the rainy season.”
“Then towards June, companies start paying their corporate income taxes, meaning they bring in forex into the country to be able to make good of their taxes, so there is an increase in forex,” Dr. Haabazoka stated.
He added that if the local unit does not appreciate towards the month end of January up to August, then there must be something fundamentally wrong and this will require quick intervention by the Central Bank and government.
Dr. Haabazoka however said it is very difficult to determine the level of appreciation because it all depends on the availability of forex and the measures that are being put in place.
“It is very difficult now to predict because I have not seen anything structural happening in the economy that can push the value of the Kwacha very high,” he added.
The US Dollar is currently buying at Twenty Five Kwacha Sixty Two Ngwee and selling at Twenty Six Kwacha Twelve Ngwee.

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