• If the currency starts moving up and down in a very sharp way, it will affect one’s ability to do business.
• It creates uncertainty in the market.
• The stronger the currency is, the more expensive the things that importers are buying from the country.

An Economist says a sharp gain in the value of the Kwacha can negatively affect exports and hurt the business environment.
Speaking to Money FM News, Mwiya Ikabongo said if the currency starts moving up and down in a very sharp way, it will affect one’s ability to do business due to uncertainty in the market.
Mr. Ikabongo noted that when one is exporting, the commodities are affordable if the currency is not too strong, therefore the stronger the currency is, the more expensive the goods that importers from other countries are buying from Zambia.
“An increase in the value of the Kwacha against other currencies can affect our exports negatively. When you are exporting, your commodities are affordable if the currency is not too strong. When you are exporting, you are selling to people outside the country and they need to buy your currency.”
“The stronger your currency is, the more expensive the things that importers are buying from your country, so this is why we are saying this can hurt the economy if it is too sharp,” Mr. Ikabongo stated.
He however said the appreciation of the Kwacha is something that every Zambian wants, but a rapid gain might hurt the economy again.
“But not to downplay the fact that the gain in the Kwacha is actually something that we want, but when it’s too quick, it might hurt the economy again, creating more uncertainty and affecting activities of speculators,” he noted.
Meanwhile, Mr. Ikabongo stated that increase in the value of the Kwacha will translate to a lower cost of importing for Zambians, resulting into more profits for the traders and reduced commodity prices for a consumer.
“We have seen the stabilization of the Kwacha and it seems to continue going down. So the implication of that, we import most of goods and we use these imports for investment and consumption. So with the Kwacha gaining value it means those imports are going to translate into a lower cost of importing and hence more profits for the traders.”
“And as a consumer also you have the price of these commodities going down. As the prices go down, you are able to buy at a cheaper rate and your income in a way seems to appreciate. A sharp gain in the value of the Kwacha like we have witnessed can have a negative impact on the business environment,” Mr. Ikabongo added.
The Zambian Kwacha seems to be on a rampage regaining some value since last week and is hovering around K17.13 ngwee and K17.46 ngwee per US dollar.