• There hasn’t been a fundamental shift in terms of economic activities as yet.
• Recent Kwacha appreciation was backed by sentiments.
• The country must move into production to deal with matters causing demand pressure.

The Kwacha has continued to lose strength against major convertible currencies due to persistent demand and supply imbalances.
Today, commercial banks in Lusaka have quoted the local unit at K16.95 Ngwee and K17.28 ngwee.
And a financial analyst is calling on government to put in place policies that will result in improving the country’s production base and help strengthen the currency.
Speaking in an interview with Money FM News, Mambo Hamaundu noted that the current Kwacha depreciation trend is because there hasn’t been a fundamental shift in terms of economic activities in the country.
Mr. Hamaundu stressed the need for the country to move into production so as to deal with matters that are causing demand pressure in order to prevent the current state of depreciation.
“There hasn’t been a fundamental shift in terms of economic activities as yet. What we must know and appreciate is that when we had that wave of appreciation it was backed by sentiments and that in itself cannot hold the currency at a particular level so we need to move into production as a country, in order for us to arrest the current state of depreciation,” Mr. Hamaundu said.
He however stated that the country is still in a better position with regards to the exchange rate compared to previous months when the local unit was in the range of 19, 20, 21 and 22 Kwacha per US dollar.
“Suffice to say that when you look at it from where we are coming from, we are still in a better position in terms of the rate of the exchange. 17 Kwacha is better than 19, 20 or 21 or 22 Kwacha, but I think it’s important that the country through government puts in place policies and mechanisms that will result in improving our production base,” he added.
Meanwhile, Mr. Hamaundu said he expects government to put more emphasis towards economic activities during the 2022 budget presentation because it is only production that will help sustain the kwacha.
“I am hoping that as the budget is being presented, we will see a lot of emphasis towards economic activities because it is only production that will actually help to make the Kwacha get stronger than it is at the moment.
“So at the moment one can say that we have seen some reversal of the gains that were recorded in August getting into a bit of September, because there were actually sentimental. It was as a result of confidence, but this is not to say that confidence is no longer there,” Mr. Hamaundu stated.
Recently the Kwacha has appreciated sharply mainly due to significant inflows from non-resident investors in Government bonds and improved market sentiments.
Between July 1 and August 31, 2021, the Kwacha strengthened by 29.6 percent to K 15.94 per US dollar.