By Levy Phiri
The kwacha has posted it’s most significant gains in three months on the back of sustained US dollar inflows, according to the Zambia National Commercial Bank.
As at 09:30 p.m. the local currency was trading at 7.44 Per dollar, signifying a 5 percent climb since it hit an all-time low of 7.89 on Wednesday, July 15.
In an email briefing to its clients Tuesday morning, the bank said: “In the short term, the kwacha is expected to continue its bullish run against dollar on the back of sustained supply and the possible unwinding of long dollar positions.”
However, whether the kwacha will be able to sustain it’s momentum in the long term remains to be seen.
Analysts have attributed the kwacha’s struggles this year to increased global strength of the U.S. currency, policy inconsistency and the falling price of copper, which accounts for about 70 percent of Zambia’s foreign exchange earnings.
Meanwhile, FNB Zambia says some of the dollar inflow could be due to demand generated by the treasury bill auction later this week.
Breaking News: “The Kwacha has appreciated against the US Dollar and other major currencies”. This is music to my grandmother in the village who would not be excited by this kind of news. Give her subsidised farming inputs, a market for her farm produce, good roads, clean drinking water, access to medical facilities and educational facilities for her grandchildren and she would definitely be smiling that at least her life has been made much more comfortable!