Kwacha in worst start since 2009

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New Kwacha notes

New Kwacha notes

Zambia’s currency is having its worst start in six years amid a dollar shortage before presidential elections in Africa’s second-biggest copper producer.

The kwacha retreated for a third day, weakening 0.3 percent to 6.5511 per dollar as of 5:07 p.m. in the capital, Lusaka. That extended 2015’s losses to 2.5 percent, the biggest slide at the turn of the year since the first week of 2009.

“Increase in dollar demand from corporates, importers and manufacturers were key drivers of the kwacha weakness in a market lacking dollar supply,” Lusaka-based Zambia National Commercial Bank Plc said in a note to clients today.

Zambians are preparing to elect a new president on Jan. 20, following the October death of Michael Sata, that pits Defense and Justice Minister Edgar Lungu of the ruling Patriotic Front against Movement for Multiparty Democracy President Nevers Mumba and United Party for National Development President Hakainde Hichilema. A new increased mining royalty system that started this year may hinder production and cut revenue, according to an industry lobby group, also threatening to pressure the kwacha.

Emerging-market currencies have lost ground as oil prices tumbling to five-year lows spurs speculation of faster economic growth in the U.S., making the dollar more attractive. The price of copper, which accounts for about 80 percent of Zambia’s export earnings, has also fallen to trade near the lowest levels in about four years.

Bloomberg

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Start: 2019-07-01 End: 2019-07-31