• The current government IMF discussions might be concluded around June.
• There will be a few more dollars being offloaded on the market.
• Kwacha will start presenting a very interesting picture once discussions are concluded.

An Economist says the Kwacha is expected to start posting positive gains against the United States dollar around June this year, when government concludes discussions with International Monetary Fund (IMF) regarding the Extended Credit Facility (ECF) programme.
Speaking in an interview with Money FM News, Partner Siyabutuba said once the discussions are concluded, there will be more dollars being offloaded on the interbank market thereby strengthening the local currency.
Mr. Siyabutuba noted that this will create a lot of relief on the part of government and boost investor confidence in the economy.
“Basically around June we should be able to see significant stabilization of the Kwacha and we are likely to see it run downwards because the current government IMF discussions might be concluded just around June. And when that happens it means that we are going to have a few more dollars being offloaded on the market.”
“But that alone is going to create a lot relief on the part of government but also create confidence levels in the economy, I think we are likely to see around June the Kwacha presenting a very interesting picture but also government would have reached a mid-year of implementing the 2022 national budget,” Mr. Siyabutuba said.
He added that when government begins to put the money in some kind of production, it is very likely that the Kwacha is going to stabilize further and run downwards.
“The conversation about government trying to borrow money, we have seen Zambia reaching some form of agreement with the IMF, so it is the borrowing activities that are going on by government that is communicating the buoyant of the dollar against the Kwacha.”
“But it is very clear that once government begins to put that money they have borrowed in some kind of production or productivity, it is very likely that the Kwacha is going to stabilize further and it is even likely to run downwards,” he explained.
On 3rd December 2021, Government and the International Monetary Fund reached a staff level agreement on a Special Drawing Right (SDR) amounting to US$1.4 billion from 2022-2025 Extended Credit Facility (ECF).
The agreement is based on Zambia’s plans to undertake bold and ambitious economic reforms which include agreeing to implement a set of policies that will help make the country progress towards achieving a stable and sustainable macroeconomic position in the medium term.