\Barclays Bank Africa has projected that the Zambian Kwacha will suffer further losses against major international currencies and will hit Kr 6.30 against the US dollar by 2014.
The Bank says reduced interest in Zambia’s bond market and unhealthy copper exports receipts will put added pressure on the local currency in the short to medium term.
“With all that is happening in the market both domestically and internationally, we can’t see how else the Kwacha will strengthen, infact our projections put the Kwacha at around Kr 6.30 against the US dollar, says Jeff Gable, Head of Research at Barclays Africa.
Mr. Gable told a business conference in Lusaka organised for Barclays Bank clients in Zambia that many portfolio investors have exited the Zambian bond market upon maturity of their investments which has affected the Kwacha’s position.
“Even if Zambian yield on government securities isn’t relatively low, we find that it can’t compete effectively with the high yield rates in Nairobi, Nigeria or even Uganda and for offshore investors or fund managers looking for where to put their investments, they will go to a place where they will get better yields and these people have been exiting their positions in Zambia and this is what is causing Kwacha losses.”
He added, “It will not be good news for imports, we see a weaker Kwacha going forward.”
Mr. Gable further noted that the amount of export receipts from copper exports do little to influence the Kwacha foreign exchange position.
“Most of the copper exporters don’t remit their returns and the little that is receipted in Zambia cannot strengthen the Kwacha much,” he said.
The PF gov’t has failed the Zambian Economy. This is ridiculous!
I miss the days of LP Mwanawasa when I was so curious to check xchange rates cause Kwacha was doing so well K3300 against a dollar. Now I don’t even bother to check coz it gets worse
We need energetic and vibrant politicians who will rescue us from this kind of mess. Very soon, the Kwacha will become very useless and it will fail to compete with these other majo currencies. Our politicians are ”politicians of the belly,” they can’t not perform, but all they can do is to satisfy themselves. Surely our economy is not in a right track and this is very serious.We need a vibrant president,this government there are just too many old folks!!!
crash landing……….
He omitted the term investor confidence. But anyway don’t listen to him, we still have the USD750M bond money in our kitty! And that bond should help the kwacha in the medium term until we spend it all!
This is not about PF it is mainly about global markets. Our economists should not only be telling the problem but be proactic to advise policy makers some of the needed measures to manage the effects!! That why i love engineering because it is a dynamic field and will find solutions to any most if not all problems.
Learn to take responsibility!
Mathematics is also very good. Just Add, Subtract, Multiply and Divide well and get the right figures.
The rowing boat on water and land tried flying on deceit, lies & now crash lands Zambia.
What determines the strength of a currency?? Is it the amount of exports or treasury reserves ??
let it be so
hahaha some people are quick to point fingers, so its all the same story of blaming PF do a research and you will be amazed at how you have been misinformed by yourself or your emotins always blaming someone..where there is a problem lies an opportunity…
I feel ashamed to tell my fiance about our currency, u know she is FROM Angola and their currency is very strong, thus why they are developing faster, i love ha so much but i lied to her about the kwacha exchange rate and because she trusts me she doesnt want to google search
This guys are paid to talk down national economies, the prophets of doom. Zambia can still do well, put aside this Barclays crap and just strategize to improve the economy.
The reallity is bad on the ground businesses are facing extreme tough conditions in their dealings.sales have dropped resulting in job losses to streamline costs.its sad
The strength of the kwacha is a reflection of what our Govt is doing in the market. This gloomy picture is an opportunity to export. The very reason that agriculture is our next bait to support the economy.
Zambia wake up wake up. It is good projection for mother Zambia. It is time for Zambia to produce own things and enrich this rich nation. The past twenty years or more Zambia has heavily relied on imports. Imports do not develop a nation. What is going to make us move forward is our capacity to export.foreign investors will always go where their money will give them an extra buck.
So, Zambians in the diaspora have also an opportunity to move their home based projects. All these will see Zambia developing and self sustaining.
So let me get this straight, our ZMW is fairing badly because our Government does not want to borrow at higher interest rates? the same interest which we Zambians pay from our had earned income?or could it be that we have already borrowed in advance from Europe cheaply and we do not need to borrow short term using expensive bonds? help me think and not criticize foolishly! out