Kwacha hits 8 month low against the dollar

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kwacha

The Kwacha has hit its lowest ebb in eight month to trade at K7 against the US dollar yesterday.

Wednesday’s trading session saw the Kwacha touch an 8-month low following strong dollar demand on Interbank.

The local unit begin trading at K6.89 but quickly breached the K7 mark and eventually settled at K7.06.

According a Cavmont market report issued today the Kwacha made a brief recovery at noon trading at just less than seven Kwacha following improved dollar supply on interbank.

However the Kwacha closed the day trading at seven Kwacha sixty ngwee which was two point four percent weaker.

Meanwhile, a financial analyst has attributed the current depreciation of the Kwacha to a fall in copper prices and a rise in oil prices on the international market.

MAMBO HAMAUNDU says the governments standoff with the mine owners over the tax legislation and Value Added Tax -VAT- refunds have also contributed to the fall of the Kwacha against the US dollar and other major convertible currencies.

He told ZNBC news in an interview that some mining firms have already hinted on plans to go on care and maintenance meaning they have already reduced their production capacity.

Mr. HAMAUNDU says this has contributed to loss of investor confidence hence dollar inflows are not adequate.

He says the external forces such as decline in copper prices and rise in oil prices are difficult for government to address.

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82 COMMENTS

    • It will be Lungu’s third time to visit Zimbabwe after he flew into the country to consult and thank President Mugabe shortly before and soon after he was elected Zambian leader.

      The announcement was made by Zimbabwe’s Minister of Industry and Commerce, Mike Bimha, at a press briefing in Bulawayo on Thursday.

      Bimha said government had acceded to the request made by the ZITF company to have the recently elected Zambian leader to officiate at the trade showcase.,,,,,,,,,

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    • Chagwa wagwesa kwacha. PF has no clear policy direction in the economic sense. Take a look at the SIs which were reversed, the mineral royalty tax and the handling of agriculture. Then one is not far from having a the correct position, that PF is a Project Failed.

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    • Like I said folks that PF minions are going to attribute the fall in Kwacha to EXOGENOUS factors for which they have absolutely no control.

      In my previous comments, I said that the only way to arrest this situation by implementing sound policies which will deal with ENDOGENOUS causes of our Kwacha to perform badly such as TRADE DEFICIT , DEBT ACQUISITION, and POOR MONETARY POLICIES.

      How to arrest the Trade deficit and poor monetary policies, was dealt with extensively by HH during the assignment interview with MUVI TV.

      Zambia needs a technocrats to lay the foundation for real economic growth like HH’s team.

      Well people voted for infintu ni Lungu, and they will get exactly what they wanted; more misery and high cost of living.

      Zim effect is fast coming to Zambia. So be…

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    • KWACHA TO HIT OVER K50 PER $ DOLLAR BY 2016.

      The serious issue we should be debating is KWACHA’s free fall against the $Dollar.

      At the rate the kwacha is falling, it will surely hit well over K50 per dollar by 2016 due to PF ‘s inability to deal with the TRADE DEFICIT and to implement sensible monetary policies.

      PF has no clue of how to stop the kwacha falling dismally because its composed of thugs who do Not understand how to deal with endogenous causes such as TRADE DEFICIT and MONETARY POLICIES, but simply turn a blind eye to enrich them selves first at the expense of the poor common man. Thats why they all deserve the label thug.

      Now PF is sending another clueless delegation to the US to negotiate another BOND LOAN to use to service the $1.75 billion bond it took out las

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    • LUNGU HAS NO CLUE IN GOVERNANCE! HOW DO YOU MAKE SUCH A CLUELESS PERSON HEAD OF STATE? ZAMBIANS YOU AMUSE ME. WHY SHOULD YOU CONTINUE TO ALLOW THIEVES TO STILL RUN OUR COUNTRY? HOW DO YOU EXPECT THE ECONOMY OF OUR COUNTRY TO GROW WHEN IT IS THE THIEVES IN CONTROL OF THE BAG OF OUR MONEY? WHY SHOULD THERE BE PRESIDENTIAL ELECTIONS IN ZAMBIA WHEN THIEVES CONTINUE TO IMPOSE THEMSELVES ON US?
      ZAMBIA WILL SOON BE CHOKED! LUNGU HAS SOLD AND DESTROYED OUR COUNTRY. LOOK AT THE POOR RAIN PATTERN THIS YEAR. HUNGER IS LOOMING IN THE COUNTRY.

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    • Chagwa agwesa Kwacha bane. Malawian Kwacha is on the rise while Zambian Kwacha is falling.

      Just last week Malawian Kwacha gained from K656 per £pound to K635 per £pound. Remember Malawi never rebased their money. If you rebase it just like Zambia did, then Malawian is currently at K0.635 (Rebased) to a £pound.

      So is this so called PF ‘s global trend is not affecting fellow poorer neighbour with less resources than us?

      Why Malawian Kwacha doing fine compared to Zambian Kwacha?

      Answer:

      Malawi is in capable hands of a professional lawyer who has surrounded himself with people who know what they doing. His government is the smallest in Southern Africa despite Malawian population being 16million, 2million larger than Zambia.

      Lungu’s team is to blame for all this mess. PF…

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    • HH is a sophisticated crook. If ever he had been elected, he would have mortgaged Zambia to the Illuminati. Good at gab, inside he is a venomous mamba from Hachipona.

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  1. President Edgar Lungu will soon head to Zimbabwe, this time under the guise of opening a Trade Fair.

    It will be Lungu’s third time to visit Zimbabwe after he flew into the country to consult and thank President Mugabe shortly before and soon after he was elected Zambian leader.

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    • Those were the days. $1 = K3.7.
      Hopefully, the standoff between the mining companies and the govt can be resolved so that Mr. Denny Kalyalya can show us how its done.

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    • Now the birds have come to roost.

      Despite being from the same fraternity (legal), I did not vote for my Senior Counsel (EL) because I saw through his sponsors. Basakalanyongo.

      I had a premonition that these goons were in it to loot and ransack the economy. I reviewed the literature of old from Socrate, Plato, Aristotle, Aquinas, Hobbes, Locke et al and I found this group that sponsored Senior Counsel a recipe of unmitigated disaster. I was a seer.

      Today, the economy is on its knees awaiting admission into ICU.

      48% voted for a coterie of basakalanyongo who in a space of 3+ years have depreciated the Kwacha by 100%.

      I care not for my comfort but moan the suffering that the less priviledged will pay for the 20 January grand mistake!

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  2. Lungu, please stop associating with that tyrant Mugabe, it’s adversely affecting our Kwacha! Bazungu don’t like it!

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    • TRUE! AND THEY WILL CONTINUE TO HIT HARD ON ZAMBIA SO THAT WE REGRET FOR HAVING LUNGU AS PRESIDENT OF ZAMBIA.

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    • Last time the kwacha performed badly against the US$ the PFgovernment blamed a cartel led by the U.S. Now external forces are being blamed. We should learn to accept when we make mistakes and that is the only way we cani prove our lot.

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  3. Levels of ignorance among bloggers who are mostly out of Zambia and with little connections back home is very worrying!

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    • Kindly elaborate on the ignorance you are alluding to. Dont you think, your case is a true testament to “umwana ushenda…”

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  4. “ifintu ni LUNGU”…they were shouting from sunroofs and windows of their cars during campaigns in December last year…he has retained the same empty tin Fossil Chikwanda at Finance, clinged on to the defence position and we expect to see improvement….really laughable…anyway its way its win-win for us at least sending funds via Western Union, paying workers salaries and shipping will not be that expensive!!

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    • @Jay Jay

      I am in Zambia. This Kwacha disaster is hurting. I am relatively well to do but that does not apply to the majority of Zambians.

      I ask that you temper your blog with empathy of the suffering masses.

      By the way, I am part of the 47% that voted for what we considered a man who could assemble a team to redeem Zambia’s economy. I am proud of my vote and will come 2016 cast it the same ballot box. Hopefully, a critical mass will go for economic recovery and prosperity for all.

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  5. Its lungu and his useless excessive cabinet to blame
    This kwacha depreciation is unprecedented!!! it unheard of!!!! zambia is being neutralised by its thinkless citizens who reject right people to rule zambia due to their tribe.An economist comes to redeem zambias economy,zambians turn on deaf ears.shame!!!! wait and see very soon confessions will be recorded.zambians are hyperparasites!! they are feeble-minded!!!
    weak currency rsults into weak economic stability

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  6. What a disgrace Zambia is. Rated poorest nation in the whole world in 2014: “Zambia is the poorest country in the world in 2014 with an alarming poverty rate of 86 percent coming behind Zimbabwe, war prone Gaza and calamity ravaged Haiti….”
    http://theweeklyworld.com/issues/worlds-poorest-country-2014-zambia/
    Good luck with that. By then, Zambia kwacha was K6000 to US$. Now its trading at K7000 to US$. Did the people really think that Mr Lungu was going to change the economy of the country?

    By the end of next year, 2016, there will be zero hope for Zambia. What a fallen state!

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  7. Hahahahahahahahahaaaaa $ 1= K7. Tough times in Zambia. No importing of goods because you will pay more kwachas than you did when $ 1 was at K4.50.

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  8. Let us just rebase again, otherwise our Kwacha will now be termed the most useless currency in the world. In a way, this will imply that we Zambians will be the most useless human beings in the world. This is not a good title to carry at all.

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  9. Watch this space as long as Lungu does not do anything about his closeness with Mugabe and Zimbabwe we are in great trouble. Let him stay away from this Mugabe, this friendship is not adding any value to our economy. Good example is when LPM denounced Mugabe’s bad governance we saw how our Kwacha appreciated it came as low as K3 against the dollar. Please ama advisers to Lungu start doing your job not just eating and fattening your bellies.

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    • Last time the kwacha performed badly against the US$ the PFgovernment blamed a cartel led by the U.S. Now external forces are being blamed. We should learn to accept when we make mistakes and that is the only way we cani prove our lot.

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    • I really don’t understand President Lungu’s fascination or alliance with Mugabe! It is beyond me. That is why I will always hold LPM in high esteem. He was the only Africanleader to speak out against Mugabe’s tyranny. I applaud the man. Aligning Zambia to Mugabe will not do us any favours. It will be like a milestone around our necks.

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  10. NOW I HEAR THEY HAVE GONE BACK TO THE MINE OWNERS TO BEG FOR REVERSAL OF THAT STATUTORY INSTRUMENT………..WHY DID THEY EVEN ENACT IT IN THE FIRST PLACE

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  11. @brick force, what is causing thee kwacha fluctuations is being addressed soon you fellows will have nothing going to talk about in that regard. All world currencies are struggling look at the rand today it’s at their 7 month low, Alot off factors at play, the new BOZ boss is working on it….

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    • You say all world economies are struggling, but its not true. Both Sterling and the Dollar are strong along with numerous other currencies.

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  12. Zambian currency will remain fragile as long as the country does not fundamentally reduce its import base and diversify its export base. Why should the country be importing tooth picks and biscuits?. Its all about pragmatic and prudent economic planning that maximizes a country’s opportunities for business growth. Look at how Zim and SA have shrewdly increased their business stake in Victoria Falls through infrastructure development, advertising, low cost airlines and cultural branding. Zambia appears keen on political correctness while other entities in the region focus on the coin- a more sustainable approach I think.

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  13. Soon we will see your eyes with tears of regretting more especially those who were shouting that Tulefwaya ba Lungu, Mulungu kuti asonste asonte Chani?

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  14. This is not surprising. Economic results speak louder than political scheming and slogans. Remember that in 1970 the rate was ZMK 0.714286/USD. By 1990, it was ZMK30.130/USD and today the rate is ZMK7 139.97/USD. This is what happens when you have incompetent economic managers. With probably the exception of President Mwanawasa’s regime, Zambia has had incompetent economic managers from independence. Even the PF rebasing of the kwacha was just another scandal! For 50 years, Zambian Politicians and their Economic managers have failed completely to move away from a single major export commodity (copper), failed to create a local manufacturing base, exhibited complete incompetence in management of both monetary and fiscal policies. Zambians are used to poverty and incompetence! Enjoy it!

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    • @ C.Kasonde
      Its not that Zambians enjoy poverty, the real problem is illiteracy. The majority of the electorate do not understand anything about tax, inflation, interest rates and the like neither do they understand that we rely on copper and copper prices fluctuate on the int’l market. The other issue is that of voting on tribal lines forsaking all else. With education(not just academic), it can get better. When you know better, you do better.

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  15. @ Chinyama: this unprecedented rapid depreciation of the Kwacha is not a matter that shud be taken lightly & casually. Whilst the Rand may also be weakening, South Africa’s manufacturing base and level of industrialization can not be compared to Zambia’s. Ours is purely import oriented economy. Over 70% of goods/services available on the Zambian market are imported. Can u imagine the effects of a worthless Kwacha on students studying courses that are managed by bodies outside Zambia? Think of fuels & oils, includ. jet fuels? Think of cross border traders! Think of m.v. spares! Think of tyres, etc! I guess yo wage is in ZMW. In real terms it keeps on declining every day. Meanwhile even school fees for yo kids are going up. Yo wage is getting too squeezed. Just be objective mate.

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  16. This is pathetic. Do we really have a government? Why are they not telling us how the depreciation of our currency is being addressed? Or there is nothing the government is doing about it? Look at Kambwili; he appoints his business partner and his cousin to key board positions. How do these PF minions think? Does he think Zambians are foolish? How can a credible person begin awarding jobs to his friends and relatives with impunity? Does Edgar Lungu allow this? It is the inconsistencies of policy pronouncements, incompetent ministers such as Kambwili, bloated cabinet appointed by Lungu, one thousand deputy ministers put together that are bringing our economy down. How can you explain the president appointing a large cabinet in such a small economy? Does he care for the people who voted?

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    • Because they don’t know how to explain the depreciation. Besides how many people are going to understand. The levels of illiteracy in this country are so high. We don’t understand the economy yet pretend we do.

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  17. This is why majority Zambians will never vote for tribal HH!!why can you be happy over weak kwacha?only a satanist wishes others bad!!!Edgar Lungu has nothing to do with a weak kwacha!!!dont cheat yourselves!!even HH would have not helped kwacha to gain.there are so many factors which are weakening the kwacha!!STOP BLAME GAMES AND OFFER SOLUTIONS IF YOU’RE REAL ZAMBIANS!!!FOR SURE IFINTU NI LUNGU AND IN 2016 WE’LL COLOPA YOU CRY BABIES IN UPND USING NEGA NEGA FORMULA!!!!

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    • You, my friend, are an example of how dunderheads think and talk, typical cadre. Talk about the depreciation of the kwacha and what could be causing it not that nonsense. Very childish.

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    • @eddy

      Does it mean that Lungu has NO acumen like his fellow lawyer Mwanawasa who managed against all odds to make the Kwacha gain while busy negotiating for debt cancellation?

      Lungu is doing the opposite. He is contracting more debt by borrowing more instead of focussing on ways to reduce the debt burden and look for other ways to raise income in the country.

      Government can raise billions out of private estate businesses across the country and fund the debt and other programmes out of this money. This just one of the ways. But they choose not to because most such businesses are owned by their cadres.

      To think its God fault why the Kwacha is falling, is total madness on your part Eddy.

      Lungu and his PF administration are to blame for the fall in the kwacha.

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    • Eddy, your analysis is narrow and not deep in scope. The economy is driven by a number of factors yes. Some of the factors are endogenous, within the control of a country. In this case PF policies are not pro-business or pro-poor in nature. The kwacha is performing badly due to poor policies such as the canceled SIs whose effects are still with us. Now the issue of 20% tax at production is crazy to say the least. Soon this will be reversed too. That is well leadership comes, because once a nation changes too often their position, it implies the nation is unstable for business, which is a recipe for externalization of forex which Zambia is experiencing now. hopefully this educates your future debate i.e. debate away from tribal-lines.

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  18. Ba Eddy I think you have a big problem. No one is happy about the weakening of our Kwacha we are all dead worried. I voted for EL and am concerned about the going down of the Kwacha, we are all affected whether voted for EL or HH. This is about Zambia as a country not merely politicking.

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  19. “‘Meanwhile, a financial analyst has attributed the current depreciation of the Kwacha to a fall in copper prices and a rise in oil prices on the international market.

    MAMBO HAMAUNDU says the governments standoff with the mine owners over the tax legislation and Value Added Tax -VAT- refunds have also contributed to the fall of the Kwacha against the US dollar and other major convertible currencies.””

    I SOME HOW GET TO THINK THAT THE REAL MEAT SHOULD BE BROUGHT OUT THE PATH THE KWACHA HAS TAKEN IS ALREADY KNOWN AND PEOPLE HAVE PLOTTED SO COMMENTARY MAS GIVE FUNDAMENTAL REASONS AND ISOLATE THE RANDOM VARIATIONS TO SEE THE FUTURE

    ITS LIKE THERE IS NO ENTERPRISE RISK MANAGEMENT I THINK DECOMPOSITION OF VOLATILITY FURTHER WILL…

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  20. Now I know why a kaponya on the streets cant
    trust our intellectuals ba zed. Most of them are
    not even worth the paper their degree is printed
    on. We have educated chaps pretending that the
    kwacha breaching the psychological level of 7 is
    because Lungu was voted in . Iwe copper prices to
    which our currency shows strong correlation have
    dropped 50% over the last 3 yrs and you want to
    blame a freshman president for that? Are you any
    better than the kaponya out there in terms of
    understanding these issues?

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    • My friend,it is not all the money from copper sales that come back to Zambia.The mines only bring back money to pay salaries and suppliers.It is actually safe to say the money the mines bring into zambia is the same,whether the copper price is high or low.This devaluation of the kwacha is mainly as a result of untrust worhness of PF government.Remember what happened to zimbabwe,it all started when Mugabe started grabing farms from whites.Nothing special happened other than this.Just tell your Lungu to distance himself from RB and “cut all his muppet strings”,Chikwanda must be dropped.When investors start seeing Lungu as himself,you will see how the kwacha will gain value rapidly.Remember,there was nothing special that Levy did but good governance.

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  21. HELP PEOPLE SEE THE VOLATILITY FUNDAMENTALS IN THE KWACHA

    EVEN THEN ITS LIKE THE KWACHA IS A FREE PEGGED WITHOUT ANY FALL BACK ITS LIKE NO MATRESS TO FALL ON THEN EVEN OUR FIRMS IN TRADE DO THEY DO SOME PASSIVE HEDGING,SOME DISCRETIONARY OR ENGAGE IN ACTIVE CURRENCY MANAGEMENT
    IF ITS SO A LIQUIDITY TRADED AND ACTIVELY POSITIONED CURRENCY WILL MARGINALLY LOOSE ITS BASIS POINTS EVEN IN VERY DISTRESSED SITUATIONS OVER THE SHORTTERM THEN PEOPLE WILL SEE ITS TRAGETORY AND SEE WHERE IN LONGTERM IT WILL REST
    ITS SOMETHING TO APETISE THE FIRMS AND BADEX TO TAKE UP AND ENSURE THE RISKS IN THE KWACHA ARE ABSORBED AND THE EXCHANGE VOLATILITY IS WITHIN THE BASIS MARGIN TOLERANCE…

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  22. BUT SO ALONGAS THERE IS NO CURTAILING TO CARRY TRADE INCLINATION IN ZAMBIA “‘PREFERRING THE USD/EURO AND OTHERS IN HUGE POSITIONS”‘ WITHOUT DEVELOPING CURRENCY TRADERS IN ZAMBIA JUST LIKE ANY PROFESSIONS IN FINANCIAL INSTITUTIONS AND MAKING THE CURRENCY MARKET MORE TRANSPARENY WITH CORRELATIONS WITH OTHER TRANSPARENT ASSETS MARKETS WE SHALL FOREVER BE TRADING IN THE DARK POOL AND ASSETS WILL NOT BE AS FLUID AS WE MAY WANT TO ENSURE SHOCKS IN THE KWACHA ARE NOTICED AND ABIRTRAGED AWAY BY MOVING IN TO PROFIT IN THOSE GAINS WITHOUT MUCH US OF THE TRADITION OMO BY BOZ
    THE MARKET SHOULD BE ABLE TO CORRECT ITS SELF ESPECIALLY THAT ITS BUSINESS AS USUAL MANAGED INTERVENTIONS ARE…

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  23. @eddy, there are no blame games here, the kwacha went into a free fall zone just after Lungu ascended to power and to make matters worse, the man is very clueless on how to run the country. He seems to be spending more time with Mugabe who has destroyed his economy instead of devising means of helping the economy grow. No doubt, this unholy alliance with Mugabe has a negative impact on the performance of the kwacha. Which country in Africa has close ties with Zimbabwe and has its currency performing well? This headless chicken is destroying the economy. South Africa tried to forge a good relationship, the rand started falling. Lungu thought to run the country was as easy as drinking wine. Going to Zimbabwe regularly will not improve the image of the country.

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  24. SHORTTERM AND MARGINAL EFFECT THE SAVINGS IN COMMODITITIES SOLD EARLY AT HUGE MARGINS ARE THE ONES TO CHANGE ASSET CLASSES AND PROFIT IN CURRENCY TRADING TO SCALP ON THE FALL IN THE KWACHA AND THE ENTIRE ZAMBIAN ECONOMY BECOMES INSULATED AND MARKETS ARE SUSTAINED HEALTHLY AND EVERY ONE SMILES AND ITS A BEAUTY AGAIN FOR ALL BUSINESSES
    ADDRESS POLICY ISSUES FOR LONGTERM KWACHA MANAGEMENT WILL DEVELOPMENT OF CURRENCY TRADERS AND INSTITUTIONAL FRAMEWORK BENEFITS FROM ZAMBIA RESOURCE DRIVEN ECONOMY

    ITS NOT THE RANDOM WALK AND FIRE FIGHTING SCENARIO BUT LONGTERM MARRYING THOSE MINING INTO AN EFFECTIVE CURRENCY ZAMBIAN KWACHA FUNDAMENTAL EQUATIONS AND KNOWING TO FLEX WELL

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    • Surely even a surgeon explains in plain English to his patient…I have told you time and time that part of being educated is to comunicte to all the masses at all levels.
      Put that text book down!!

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    • Jonathan, you lost me at ‘SHORTTERM’. Being coherent is the mark of a true professional. You are not coherent.

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  25. This man should be spending more time on tackling big issues that are besetting the economy such as the tax registration with the mines. Ghana had their currency debased much longer than Zambia but it is still very strong because of good policies. Mugabe wants to use this useless Lungu to improve his own image. If Lungu wants to improve the image of the country, he should start associating with presidents of good characters in Africa. You cannot be friends with someone who is always failing all his tests and expect to pass. Never! Birds of the same feathers flock together. It seems Mugabe has initiated Lungu into the group of failures. All the presidents of Botswana refused to associate with Mugabe, their economy is performing very well. Clueless and dull president Lungu.

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  26. Lungu is a very good president stop condeming our president bafikalaa,this is the man we had all been waitin 4,see him work and all u gangsters yipyapin here will go mute

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  27. May be Dora Siliya can now sing the loudest! They all wanted a weak guy to hold him by his weapons that are supposed to be protected. Banda and his team are the devil’s representatives on earth.

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  28. We told you so. The situation with the Kwacha is not a problem with no solution. The reason the Kwacha continues to free fall is luck of sound economic policy. Balance of payments have to be addressed. The problem is that our current government is sacrificing our economy for short term political expediency. Due to luck of transparency in our monetary policy we don’t know howmany months supply to support imports BoZ has at hand. We sounded this alarm months ago and still the government has shown no interest in curbing its expenses and applying any kind of austerity. Very soon we will be standing in line to purchase even the barest of necessities. Government needs to improve our small scale manufacturing, tourism and agriculture Instead they are showing tendencies that scare investors

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  29. It might seem petty but perception of trend in any administration is as important as reality. Question if any one of us was a foreign investor with $2 million and wanted to start say a small processing plant in Zambia and you see him embracing and associating with Mugabe the way he is, what’s the first thing that comes to mind? Lungu needs to radiate positivity and confidence to foster investment. Work with the mining sector to encourage more investment in capital goods. Improve agricultural production of export cash crops and avoid speculation in the system by showing transparency. Food and energy security. Unemployment is Zambias worsed enemy so as the kwacha falls so does the real income of the black market economic players. Hard times ahead. We told you so. Ifintu ni PF? Lol okay!

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  30. Can you imagine for a second in February 2015 being February 2011 and imagine also that Mr. Sata is alive and well having access to radio stations and PF’s Kambwili is opposition bull dog and also imagine Hakainde is president then and the Kwacha is trading K7.10 to a dollar and a report comes out to say Zambia is the poorest country in the world. Imagine what venom would be spewed. I leave it to your imagination!

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  31. Every Zambian has to be concerned about the ZK. Apart from the export, import factor, there is the issue of investor confidence in the Zambian economy. It is about perceptions. This can not be changed overnight as it requires sustained confidence building measures based on political, social and economic stability as well as consistence, predictability and credibility.

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  32. How I wish we had sound economic think-tank (online Zambian bloggers)… Firstly, de-valuing your local currency attracts FDI into the country, because it’s easier for foreign firms to do bussiness… Secondly, we should never give in to the demands of these fake investors in our mines, we have been therefore before (1970s copper value crisis), what our government should do is aquire huge stakes in these mines and play the long game and wait for the world economic pendulum (Chinese economy) to start swinging faster!!
    Why is the $ always weaker against the euro and pound…??? Zambian economist, awe sure…

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  33. That is the issue if you are a resource driven country and counter parties are revising down wards their growth forecast in projects , in those commodities you have that direct hit and especially that you are not negatively correlated to have a fall back and channel losses to insulate BUT the question is is their NO foresight on the micro and macro level within the Financial system to insulate and observe to protect the Kwacha from systematic economic effects in the country

    Build a solid Financial system in all asset classes and a solid Financial depth in all asset classes matched with skilling and dynamics

    Then commodity prices are they slow to react or the underlying in it

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  34. When you look at the Indexes in manufacturing sector at “‘Central Statistics'” and check the BOZ sight on bonds and treasury Bills Do we see the Kwacha Movement relating to those Numbers and term structure If so why and is the OMO bearing a local effect as a measure of kwacha pressure cover”’
    Are Banks and firms participating in volumes to significantly affect the Kwacha positively or is it always the case the Kwacha being under strain and pressure against the major and only posting marginal and non significance gains with no long-term down ward trend Can we say we have exported and saved so much cover of Kwacha in dollars to insulate in time of Production & Market…

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  35. Yaa

    In short , the structural gov in policies fiscal, monetary ,private vs public sectors affecting those exogenous shocks in oil, metals, financial crises elsewhere, the linkages in them to our interest /Exchange rates implied in our kwacha factoring in the country risk analysis profile in fiscal/monetary policies, those growth prospects translating in the competitiveness of our kwacha as a currency
    Our accounts on national and external being controlled just as the external debt at the same time cementing our reserves to ensure some healthy plentiful liquidity -reserves % of shorterm debt over a 12 months period within 100% and 200%
    The prospects are good if worked in the long-term addressing Kwacha

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  36. Lusaka All Share Index (LASI.zm)

    Close Open Points % High Low YTD YOY
    6,168.97 6,168.50 +0.47 +0.01 6,168.97 6,168.50 +0.46 +15.05

    When the Kwacha is depreciating a robust financial system moves with it taking aware losses and taking in those asset classes to positively profit until marginally all are compensated for those efficiencies in trade and skill to see over the horizon Example of Luse index above, there has to be a correlation between a fall in our kwacha and the movement in shares trades at luse The all share index closing Friday 20 ,should be active There has to be a correlation in a deep financial system with losses being taken…

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  37. Then unless you are running huge balances for huge clients with significant effect on the cashflows with huge positions in asset classes You are not in the position to make a market commentary that is thorough and well researched with basis and reasoning It becomes speculative

    You need to have all composites in place to make a commentary and only banks with all accounts and information effecting are in the Position

    In this case of Zambia BOZ and Ministry of Finance exert the direction That is why its important to wait for their comments either in committee or other and comment to reconfirm even a monthly consolidate BAZ pronouncement should be less speculative

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  38. Capital expenditures are 50% of GDP in China. In the United States, 70% of GDP is consumption. China is trying to reorient its economy, which means less demand for commodities.

    So what is Zambia? If we went thru a super cycle in Chinese driven commodity demand, that super cycle in commodities prices and demand may be over

    Emerging market economies that exported commodities into China are going to struggle for a time to come and Zambia should position to diversify and avoid the above US Chinese GDP if the kwacha will remain stronger in the long-term

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  39. The lessons is for us who trade currencies either on the sell side or buy side not to effect movement to profit on those our clients who may short sell or go long their positions in those currencies

    We should be aware of our commentary and comments as it affects unfairly those who are not so ready on currency direction

    we should avoid the speculative pump strategy in our kwacha analysis that may mislead clients who may not have the basis to go long or short their currency positions
    Especially those who trade on behalf we should avoid acts or comments that amounts to MARKET MANIPULATION especially towards the close of the month and avoid trading on that information without disclaimer

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  40. If you comment make sure you express the basis and reasoning and advice those who may place reliance on to seek the services of a competent Financial Advisor or Investments Bank but then it should not be a pump strategy having looked over the wall from colleagues on the buy-side or sell side That amounts to market manipulation or front running

    Distinguish also between clients who pay for the fees in currency advisory and those that do not and the responsibilities that go with it

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  41. To avoid noise trading or commenting and giving commentary in the “Zambia Currency dark pool market” as it where, retail trading platforms could be made available as part of the solutions to curtail speculative currency trading

    This could be done for forex traders to purchase forex within their accounts using an e trading platforms liked to margin accounts for those FX vendors and banking thereby increasing efficiencies in trades in volumes and settlementing of those positions allowing rates to truly move according to the real market sentiments with rates uploads by vendors accurately “on the market ”

    Restricting trades for those commenting on forex is welcome to ensure clients cover

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  42. for that period and the regulator should review the trades before and after their commentary to avoid “boot strapping or scalping clients in rates”

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