• In quarter 1, the Kwacha depreciated against the US dollar by 4.4 percent.
• On a net basis, BoZ sold US$259.7 million compared with US$339.8 million in the preceding quarter.
• This largely reflected receipts of tax obligations from the mining companies.

The Zambian currency has been taking a downward trend over the past few months, losing its value against the United States dollar and other convertibles.
At the opening of the market today Friday 21st May, 2021, some commercial banks in Lusaka have quoted the local currency trading at about K22.27 and K22.70 on the bid and offer respectively.
On Friday last week, the currency opened and closed the market trading at K22.22 and K22.65.
According to the Bank of Zambia, the Kwacha weakened further although at a slower pace, as net demand moderated.
Bank Governor Christopher Mvunga disclosed on Wednesday this week at a media briefing that during the first quarter of 2021, the currency depreciated against the US dollar by 4.4 percent, compared with the 9.4 percent devaluation rate in the previous quarter.
Mr. Mvunga said the Central Bank continued to intervene to moderate exchange rate pressures.
“On a net basis, the bank sold US$259.7 million compared with US$339.8 million in the preceding quarter. This largely reflected the receipts of tax obligations from the mining companies which were sold back to the market,” Mr. Mvunga said.
He added that Gross domestic reserves broadly remained unchanged at US$1.2 billion, which is equivalent to 2.1 months of import cover at the end of March this year.
And several economists in the country have attributed the depreciating of the Kwacha to various factors which include excess demand for United States dollars on the market.
Dr. Patrick Chileshe disclosed to Money FM News that there is high demand for dollars while supply for the greenback and other major convertible currencies is very limited.
Dr. Chileshe observed that April’s depreciation of the local unit was the weakest to the start of 2021 and it has continued weakening into the month of May.
Meanwhile, Mambo Hamaundu, a financial Analyst, noted that the demand pressures are still in existence and they are largely contributing to the devaluation of the currency due to high levels of indebtedness which is putting a lot of demand pressure on government.
“There are indications that the Kwacha could continue sliding downwards though not significantly but the demand pressures are still there and they are still contributing to this weakening of our currency primarily because of high levels of indebtedness which is putting a lot of demand pressure on government in terms of wanting to buy dollars,” Mr. Hamaundu noted.
Another Economist Shabdin Mweemba said exporting more is the only sure way to strengthen the Kwacha which has been losing value against major convertibles.
Therefore, there is urgent need for government to speed up diversification of the country’s export base towards sectors such as Agriculture, Manufacturing and Tourism because.