The Kwacha has staged an impressive rally on the foreign exchange market, reaching K23.46 after weeks of trading at levels exceeding K26 and K27. A survey conducted by the Zambia National Broadcasting Corporation (ZNBC) across various bureaus confirmed that the dollar was being bought at K23 and sold at K23.46.
Market analysts and economists have pointed to governmental and central bank interventions as key drivers behind this sudden appreciation.
Ronald Mwanza, the Chief Executive Officer of the Bankers Association of Zambia (BAZ), attributed the Kwacha’s appreciation to recent actions taken by both the government and the central bank. Mwanza specifically highlighted the increase in the statutory reserve ratio, explaining that the government’s decision to raise this ratio was in response to sustained high demand for foreign exchange. This move, according to Mwanza, has effectively tightened liquidity in the market and supported the Kwacha’s upward trajectory.
Economist Noel Nkoma echoed Mwanza’s sentiments, emphasizing the fiscal measures implemented by the government. Nkoma noted that the government’s decision to withdraw excess liquidity from commercial banks has created space for the Kwacha to strengthen further.
The recent surge in the Kwacha comes on the heels of the Bank of Zambia’s decision earlier this month to raise the statutory reserve ratio from 17 percent to 26 percent, which came into effect on February 5th. This move signaled a proactive approach by authorities to address the challenges posed by high demand for foreign currency.
The sudden turnaround in the Kwacha’s fortunes has been met with optimism among market participants and stakeholders, who view it as a positive development for Zambia’s economy. However, analysts caution that sustained efforts will be required to maintain this momentum and ensure stability in the foreign exchange market.
As the Kwacha continues its upward trajectory, attention now turns to the effectiveness of ongoing fiscal and monetary measures in supporting its gains and fostering economic growth in Zambia.
We don’t want band aid solutions and this is where we get things wrong….we need long term plans not just fly by night ideas….we are fooling ourselves…of course we want things to get better in Zambia but not through gimmicks and short-term care
Difficult to understand.
SURGES ???? by 0.01 or 0.02
REALLY ???
I think a dictionary is needed
Funny Lt when the Kwacha plummeted you never said anything.
Bad News-for the govt- aint news in Zambia
Boz governor actually said that the central bank had flooded the market with $$$. I forget the figure. As a person who buys dollars for my travels I hope and pray this will be sustained.
121 million US
Oh boy, I saw this one coming soon, I had to rush by Thursday finding my projects pa Zed. Sometimes you win and sometimes you win.
These fluctuations and interventions are nonsensical. If 2 SMEs remit $50,000 each for a 20ft container of similar goods, one does it on Monday when the rate is at K27 and the other on Wednesday when the rate is at K23 the former won’t compete favourably. The two consignments will arrive at the same time but one will be K200,000 more expensive because of the exchange rate. Who can celebrate such an economy? We’ve wrong people in charge
They have offloaded dollars to create an imaginary fictitious surge. Meanwhile it is still lower than it was when we left power
Hope they can maintain this rate for some time.
What are they selling? Which can maintain our Kwacha
And we think we are independent and yet we depend on the West for us to survive….even our currency depends on the west….our women think that a white skin is much better than a dark skin and they end bleaching their God given skins and add those useless wigs on top of their heads imitating white women
Vendetta announced they have pumped in their initial funds to restart kcm which in turn BOZ has pumped into the market coupled with increasing the statutory ratio has resulted in this appreciation although its a short term measure.
Improving by 0.01 or 0.02? By and large it is one hundredth of a kwacha. So the kwacha has APPRECIATED by 1 or 2 Ngwee.
Mind you, today I was converting my USD500 K13,450.00. That’s how expensive the dollar is currently to our valueless kwacha.
Sudden appreciation is in itself very distractive and destructive to business especially us in import business, even if it stays three months at 23 it’s not long enough to build confidence.
Try and error economics
kkkkkk dollar kwacha stop lying to people whilst nothing has been done K23 is still very high and offloading dollar to caution the impact is not solving the problem.The thing is to just bring more forex in the country through exporting value additional goods.What is been explained above is not the true picture and stop it and do your home work.