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Alba Iulia
Monday, May 25, 2020

Zambia’s kwacha steadies on Central bank intervention after record fall

Economy Zambia's kwacha steadies on Central bank intervention after record fall

New Kwacha Notes

Zambia’s kwacha surrendered early gains against the dollar after opening stronger on Tuesday, following a 17 percent plunge on Monday to a record low triggered by a sharp slide in copper prices and a ratings downgrade.

The kwacha gained over 4 percent to trade at 12.0280 per dollar in early trade after the central bank intervened by selling dollars in the market, but later gave up gains to trade flat at 12.5400 by 08:30hrs.

“The central bank has been pumping dollars in the market to shore up a weakening kwacha,” Bwalya Mwanza, a forex trader at BancABC said.

Zambia’s currency went into freefall on Monday as prices for its copper exports hit a one-month low. It was further hampered by a rating downgrade from Moody’s.

“The selloff was a bit overdone and this is just a bit of a correction. It’s anyone’s guess how far the correction will go,” said Gerald Ndhlovu, a trader at First National Bank’s Lusaka division.

President Edgar Lungu’s special assistant for project implementation, Lucky Mulusa, said in a statement that a government department sourcing dollars from the market had also put pressure on the kwacha.

“This tends to cause shakes to the economy because usually the amounts siphoned out of the economy for the procurement of, for instance, fuel are huge,” Mulusa said.

Road contracts which are in the hands of Chinese companies have also contributed to the shortage of foreign exchange in the country as most of the money paid to them is taken out of the country

“Road contracts which are in the hands of Chinese companies have also contributed to the shortage of foreign exchange in the country as most of the money paid to them is taken out of the country,” he said.
Zambia’s state Road Development Agency (RDA) on Sept. 21 awarded a $492 million contract to China Henan International Cooperation to construct and repair roads in Africa’s second-largest copper producer.


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    • I don`t regret being a Zambian and i thank the Most holy God for allowing our humble E. Lungu to be the President of our blessed nation. Next year if God allows EL or HH to be inaugurated as the President of Zambia, i will greatly praise God Almighty for His loving kindness.

      No regret at all, because God is on the throne, therefore, peace and joy are my portions: obtained all these by the grace of God.

    • They say madness is doing the same thing over and over again and expecting diferrent results. The pumping of dollars from Central Bank has been tried before but the Kwacha down fall just hesitates only for a short period and continiues.
      Every action has got a reaction; now they are blaming the chinese contractors, who have given them the unprecedented development. Unbelievable!

    • @Nyati

      “Let his blood be on us & our children” – We asked for it, no hope, no direction.

      Blame nobody. We had a chance to change the political & economic direction in Zambia but ‘27,000’ Zambians decided to continue with the current status.

      Don’t forget that even in the bible people were given a chance by Pontius Pilate to save Christ when he said “I wash my hands of his blood” & they answered “Let his blood be on us & our children”. Lets enjoy, the worst is yet to come.

    • @ Engineer,
      Muleyumfwila mu fyalo fyabene bafika.la no lupiya tamwakwata. Echo bamyo chela no kumilasa amanaifi mu mitwe ku fi mazulu. Mwalabutauka nge mpombo.

      Chi.tole you don’t even send a ngwee kuli banoko ati niwbebo engineer.

    • Lucky Mulusa, can you tell us which Government department is that?????????

      Could it possibly be the OP withdrawing allowances to go with Lungu on his joyride to New York???

      Sounds about right. US Dollars 300,000 for chartering the plane and US Dollars 200,000 for spending money. About half a million for this little holiday at Taxpayers expense!

      So the cause is directly from the Presidents Office!!!!!!!!! ¡!!!!!!!!

  1. A government with no plans. How do you give such huge contracts without sufficient local content laws/clauses. Of course all earnings will be externalised. And these are the same chaps you want to open up dual citizenship to! As for fuel why is it a preserve for the politically connected foreigners? For easy cuts! Otherwise without corruption the importation could have been long been localised and profits therefrom retained for diversification /investment in Zambia

  2. The problem we have in Zambia is not the govt but the electorate.As long as the electorate are not objective when voting,we are going nowhere!!we shall forever be going round in circles….we dont look at the party manifestos when voting.we just look at the person’s character and that’s typical of us BLACKS!!

    • “we just look at the person’s character and that’s typical of us BLACKS!!”

      That is a fallacy. Look at the most white party in America the republicans. Every time they are in office the American economy tanks. So blame your relatives for not voting wisely not bunching us all into a pod.

  3. @quest,read and understand,dual citizenship has more advantages than disadv,95% of road and infrastructure is given to the chinese companies bcz of kick backs by politicians from top to bottom.we remit $ to support our relatives, so does the chinese,indians and other nationals working in zambia,
    @sinkolongo dryson.am sure you meant the weakness of the kwacha,this trend of kwacha down fall will continue bcz we have a president who said he has no vision,but stupid zambians casted their vote on infintu ni LUNGU.

  4. Your friends over at Glencore had a pretty bad day yesterday. There are still predictions the shares may become worthless. Boss guy had to dip in his own pocket to try and stabilise things. I’m sure you know how that feels. 80% of share value wiped off for anyone who has held on to shares from 2008. What % of currency value has been lost since 2011? Are any of you PF guys scared to accept partial blame? It’s not going to get better. Tell ED. The captain leaves the ship last…but I don’t mind if he jumps out first…chuckle.

    • When the going gets tough, babies start crying all the time! Start searching for goods and services required abroad to increase export targets, i mean anything including cow dung!

  5. When the Bank Of Zambia is asking for reduction in expenditure your Government goes on over drive for its so called infrastructural developments.Do we really need these roads and drainages now?Why build stupid roads and drainages in Woodlands and Kabulonga for example?Cant they wait.This government is shoking.And to add the icing on the cake they send a huge entourage to USA including cadres and muscisians.We are in for it.And why chatter aplane to take Lungu and his entourage to America?Sad.

  6. The government is useless ask India and Ghana they will tell you that they encourage their nationals in the diaspora to bank their dollars at home commission and tax free. These funds are monitored and they go in millions which boosts their economies. Zambian circus will be freezing accounts because you are in the opposition.

  7. Well don’t we warm you Zambian in January? While this crisis would have still unfolded under another administration, the key difference would have been in HAVING A PLAN. These PF guys, with no vision (short or long term), will rubbish all advise, stick its head in the sand and continue spending.

    Dear PF, cut government expenditure to reduce the trade deficit and pressure on the kwacha. Set up a facility for the diaspora to purchase assets in Zambia. Ramp up support to tourism and enhance promotions. Lower the cost for exporters.

    Do something.

  8. Ba UPND don’t lie to the people that you have all the answers. You are just try to get into government; it doesn’t necessarily mean if someone succeeded looting our companies then he will be a good President no!. Remember Sata promised so is HH promising .

  9. October 24, 2015 we finally kicking off the nationwide 2016 re-election campaign……This time someone that we all know very well will be sent on early retirement………….

    2016 vote PF (Edgar)

    i thank you

  10. Which government department id misusing our national cake? Problem in Zambia is that Lungu has this year entertain the likes of Kambwili; once he gets 2016, all of Satas cronies shall be gone and President Lungu will have full reign on the nation. Let him appoint more MMD and FDD MPs to ministerial positions.

  11. Zambians don’t continue crying like babies, see beyond your noses. Listen to world news ie, BBC, ALJAZEERA, CNN etc, then you will be able to understand the economics of the world today. Zambia is not alone in this, it’s worldwide, eg CHINA, MEXICO, GREECE, SOUTH AFRICA etc. READ AND DON’T BE LAZY TO LISTEN TO WORLD EVENTS TODAY. UPND DON’T CONFUSE AND MISLEAD INNOCENT ZAMBIANS, BE REAL, OR CAN YOU START EXPORTING YOUR COW DUNG FOR FOREX!!

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