Depreciation of the Kwacha due to market forces – Sata

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Zambian President, Michael Sata, has attributed the fall of the Zambian Kwacha to market forces, reports Zambia Eye’s Thom Shonga.

This is according to a statement released on the President’s Facebook page today March 3, 2014.

The president says that the exchange rate is fundamentally affected by the supply and demand of foreign exchange in the market.

“A net demand for foreign exchange, all else constant, results in depreciation while a net supply of foreign exchange contributes to a currency appreciation,” reads the President’s statement.

President Sata says that the recent in the exchange rate is due to a combination of domestic and international market developments.

The President explains that on the international front the US Dollar has gained strength against other currencies following the US Federal Reserve Bank’s decision to reduce the amount of liquidity it injects into the economy.

On the domestic front, the President attributes the depreciation of the Kwacha to Zambia’s economic activity that has seen the demand of capital goods which has increased the demand of foreign exchange.

In recent weeks the Kwacha has depreciated against the US Dollar by 4.3 per cent to its lowest point in almost ten years. Today’s rate is K5.82 to US$1.

Meanwhile, President Michael Sata has assured the nation that his government is closely monitoring developments in the foreign exchange market and has instituted necessary monetary policy that has also seen the inflation rate drop to 6.5 per cent.

Todays Foreign Exchange Rates:

Currency                              Buying                  Selling

US Dollar                              5.8198                   5.8298

GB Pound                            9.7384                   9.7569

Euro                                       8.0128                   8.0277

Rand                                      0.5367                   0.5427

Note: Rates above are a single unit for each currency converted to the Kwacha

 

Average Overnight Interbank Interest Rates

03 March 2014                                                   10.3800

Source: Bank of Zambia

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9 Responses to Depreciation of the Kwacha due to market forces – Sata

  1. Market forces!?Sata needs an economic adviser in State house.

    KC
    March 3, 2014 at 7:28 pm
    Reply

    • Has he capacity to understand? Even the purpoted posting on his Facebook page is not crafted by him. New era economists must take charge I am very pessimistic that the Kwacha will recover from its free fall and all the explanatory jargon does not appease the average Zambian on the streets trying to make a living

      FuManchu
      March 3, 2014 at 11:56 pm
      Reply

  2. HEHEHEHEHEHEEHEHEH!!!!!!!!!!!!!

    MANUEL
    March 4, 2014 at 5:36 am
    Reply

  3. Why did people cast their vote on Sata? I will never understand this in my life time. Its amazing how gullible some Zambians can be.

    Bob
    March 4, 2014 at 12:37 pm
    Reply

    • ZAMBIANS WHO HAVE YOUR SELF TO BLAME. HOW DO YOU VOTE FOR A MAN WHO DONT UNDERSTAND THINGS LIKE THE ECONOMY OF THE COUNTRY.

      THIS MAN MR. SATA IS NOT THE WHO IS POSTING THINGS ON THE SO CALLED FACE BOOK. THIS IS DONE BY FRED AND HIS FREIND WHO ARE IN CHARGE OF THE COUNTRY.

      kennedy Chipili
      March 5, 2014 at 5:51 am
      Reply

  4. Bob you can’t understand because you look at Sata in a different way, than the majority Zambians.Sata is the best wait and see.

    Nice One
    March 4, 2014 at 1:53 pm
    Reply

    • There are certain attributes he has yes but does not have the capability to stimulate our economy.Praying hard to see us fit in this global world.Really praying hard….

      KC
      March 4, 2014 at 3:12 pm
      Reply

  5. You guys do not even understand market forces!

    KC
    March 4, 2014 at 3:08 pm
    Reply

  6. Its like saying , my children are suffering because of too much visitors
    The dollar is sky rocketing because of demand ? there was NO demand in MMD ? Silly thinking …

    chakuti chake !
    March 4, 2014 at 5:50 pm
    Reply

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