FOR THE 5TH STRAIGHT DAY, KWACHA HAS BEEN GAINING

FOR THE 5TH STRAIGHT DAY, KWACHA HAS BEEN GAINING

By Dr. Lubinda Haabazoka

The Zambian kwacha has for the 5th straight day posted positive results against the US dollar.

Opening at close to k23 per dollar on Monday, the kwacha has been slowly but bullishly fighting back against the dollar breaking the k20 barrier by posting gains to reach k20,7 per dollar.

Domestic factors positively affecting the kwacha include increased forex inflows from tye mining industry amid the successful row out of the Covid 19 vaccination process. Exports of agriculture produce following yet another bumper harvest has also contributed to the Kwacha gain. Forex inflows attributed to the demand for cheaper Zambian goods amid price increases in the region have also positively affected the kwacha.

Government’s fiscal policies and the Bank of Zambia’s monetary policy have also managed to contain the negative effects of Covid 19 thereby setting a positive trajectory for Kwacha strength. The Bank of Zambia continued gold purchases has also increased investor perception as gold reserves are now forming a credible indicator of economic growth.

Non domestic economic factors positively contributing to the appreciation of the Zambian kwacha include among others: the relatively peaceful environment during the election period, investor confidence in the governance structure of the country as Zambia was highly exposed to the international community during the mourning period of our beloved First Republican President.

The commissioning by President Edgar Lungu of the 750 MW Kafue lower power project has also enhanced investor confidence as Zambia is seen to be a major exporter of energy at a time countries like South Africa are experiencing massive load shedding.

Among global factors positively affecting the kwacha is the anticipated $650bn SDR issue to all member countries by the IMF in a bid to enhance global liquidity and kickstarting global economic growth. Zambia is expected to receive around $1.4bn pushing its reserves to above $3.1bn.

The South African looting incidence has also forced investors to look at Zambia as a base for their business activities in South Africa as Zambian authorities are perceived favorable when it comes to issues of peace and the handling of the Covid 19 pandemic.

Dr Lubinda Haabazoka is president of the Economics Association of Zambia.

KWACHA TO GAIN FURTHER

Lusaka ~ Fri, 23 Jul 2021

By Brightwell Chabusha

The kwacha has been appreciating for four (4) straight days and now trading around K22.21 from K22.86 just last week.

On Tuesday, the kwacha made a huge gain to trade at around K22.54 from K22.86, then K22.49 on Wednesday and K22.21 on Thursday.

“The appreciation of the Zambian kwacha is due to improved dollar supply and the positive outlook in terms of forex reserves. Mining activities have increased resulting in increased forex inflows,” Economics Association of Zambia president Dr Lubinda Haabazoka has explained. “The country is also exporting agricultural produce after another good harvest. Also expected is an injection of $1.4bn through SDRS into our reserves as countries share $650bn free SDR allocations amid the IMF’s plans of enhancing global liquidity.”

The $1.4bn forex injection through SDRS will push our reserves to over $3.1bn by end of August, he said.

”Those hoarding the dollar should start selling now. Commodity prices are expected to start reducing with increase in kwacha value,” Dr Haabazoka said.

Kwacha maintains grip against US dollar – Zambia Daily Mail

KALONDE NYATI, Lusaka

THE Kwacha on Wednesday held firm against the United States (US) dollar for three consecutive days supported by steady greenback inflows.

Absa Bank Zambia Plc said the Kwacha was stable as corporates that are looking to meet mid-month tax obligations offloaded the dollars on the market. “Demand for the greenback continues to dominate the markets but was matched with supply inflows as corporates concluded conversions for their mid-month tax obligations,” Absa Bank said in its market update yesterday. The local unit opened and closed at K22.63 and K22.68 per dollar, same as the previous day’s close, with moderate activity seen in the market. “In the near term, we still anticipate the Kwacha to trade in a tight band as demand and supply determines its next move,” Absa Bank said. Similarly, copper prices rose yesterday as CLICK TO READ MORE