• Performance in the first quarter has been very poor.
• The Kwacha has continued losing value against the major convertibles.
• The only time that the Kwacha will bounce back is probably after elections.
An Economist observes that the performance of the Kwacha in the first quarter of 2021 has been poor because the currency has continued losing value against major convertibles.
Speaking in an interview with Money FM News, Shabdin Mweemba stated that the continued depreciation of the local unit is negatively affecting a lot of businesses as most people are failing to meet their daily profit margins.
Mr. Mweemba noted that there is no sign that the currency will appreciate anytime soon due to the current economic downturn.
“The performance has been very poor because the Kwacha has continued losing value against the major convertibles. So the performance has been bad and a lot of businesses have been affected as a result of the same weakness of the Kwacha.”
“So we just hope that in this quarter maybe things will improve, but the way things are currently moving, I don’t see it improving any time soon,” Mr. Mweemba said.
He further observed that with the general elections fast approaching, there is a temptation that government will spend more money, meaning money supply will increase, thereby weakening the kwacha further.
“Because of the elections, there is a temptation that government will spend more money, and the more money they spend, it means that money supply will increase, which even weakens the Kwacha further. The only time that we will see the Kwacha bouncing back is probably after elections,” he noted.
The Kwacha has opened the market trading at K22 and K22.40 Ngwee respectively.