• Zambia is importing more than it is exporting.
• The country is not generating as much revenue to be able to meet the demand.
• These factors are putting pressure on the exchange rate and the country’s reserves.

A Financial Analyst says the current depreciation of the Kwacha is being driven by high externalization of the United States dollar in the country by multinationals that are in the mining, wholesale and retail trade.
Speaking to Money FM News, Trevor Hambayi also noted that Zambia is importing more than it is exporting, hence the country is not generating as much revenue to be able to meet the demand in terms of the resources that are being externalized.
Mr. Hambayi said these factors are putting pressure on the exchange rate and the country’s reserves.
“The depreciation of the Kwacha is being driven by the fact that we are importing more than we are exporting, we are not generating as much revenue to be able to meet the demand in terms of the resources that we are externalizing.”
“ So other than the imports that we are doing, there is also a very high externalization of hard currency in the country by multinationals who are basically in the mining, wholesale and retail trade,” Mr. Hambayi stated.

He added even when Bank of Zambia has been injecting United States dollars into the market to try and meet the demand for the hard currency, the intervention is still not sufficient, hence the continued depreciation in the Kwacha.
“What the Central Bank has been doing in the meantime, is releasing hard currency on the market to try and meet that demand but it’s still not sufficient, and then we see this depreciation in the Kwacha,” he noted.
And Mr. Hambayi noted that the recent appreciation of the local unit was being driven by international positive sentiments resulting from the successful debt restructuring deal.
“If you look at the trends that have been driving the appreciation or depreciation of our Kwacha is the fundamental one that we have always had that has driven the appreciation of the currency has been international positive sentiments around us having to do the debt restructuring. And this is the one that has impacted us in the last 3 years.”
“Other than that is obviously the issue around the IMF where we have had the IMF approval in terms of debt restructuring, the financing that we received the US$1.3 billion, so all this has been working towards driving the appreciation of the Kwacha,” he said.
The US Dollar is currently buying at Eighteen Kwacha Seventy Six Ngwee and selling at Nineteen Kwacha Thirteen Ngwee.