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Alba Iulia
Friday, August 27, 2021

Opposition Leader expresses concern of the sudden strengthening of the Kwacha and its volatility

Economy Opposition Leader expresses concern of the sudden strengthening of the Kwacha and...

Opposition Leader of Patriots for Economic Progress (PeP) Sean Tembo has said that volatility in the exchange rate of the Kwacha against major convertible currencies is actually adverse to the economy as it undermines the ability of business entities and individuals to transact and often attracts significant foreign exchange losses to cross-border traders.

In a statement to the media, Mr. Tembo said that his party had noted with concern the huge volatility in the exchange rate of the Kwacha against major convertible currencies witnessed in the past few days.

He stated that PeP was particularly disappointed with the Bank of Zambia (BoZ) for sleeping on the job and failing to intervene to prevent the huge volatility in the Kwacha exchange rate.

“Between Thursday, July 22, 2021, and Friday, 23rd July 2021 alone, the Kwacha moved from K22.67 to K20.96 to the US Dollar as per BoZ website, which represents a 7.5 percent movement in a single day. It must be noted that one of the key mandates of the Central Bank is to maintain stability in the forex market and to intervene through Open Market Operations where necessary. This is where the Central Bank either sells or buys forex from the open market so as to prevent the Kwacha from over-depreciating or over-appreciating, as the case might be, and therefore keep it stable,” Tembo stated.

Tembo, a Chartered Accountant himself, further noted that the International Monetary Fund (IMF) in its governing rules and regulations defines a stable currency as one which records daily movements of between zero percent and 0.5 percent.

He stated that the 7.5 percent movement witnessed between 22 and July 23 was unprecedented in terms of currency volatility anywhere in the world and is an unequivocal verdict on the lack of competence of the Bank of Zambia and its leadership.

“As Patriots for Economic Progress, we are fully aware of the fact that as we draw closer to the 12th August 2021 general elections, the PF and its government will become more and more desperate and will try to present a cosmetic view of the performance of the economy. This is evidently intended to misled voters so as to create a false perception that the economy is on a path of recovery when in fact not,” he stated.

Tembo lamented that this appetite by the government to falsify the actual poor performance of the economy was now manifesting itself through the manipulation of the Kwacha exchange rate by the Bank of Zambia, among others.

He stated that his party had no doubt that the sudden appreciation of the Kwacha in the past few days was not supported by any fundamentals but was most likely a result of the Bank of Zambia off-loading forex reserves on the open market as it plays its part in trying to mask the poor performance of the economy so as to mislead voters.
“Such an approach is however not sustainable as we shall soon run out of the little forex reserves that we have. The forex volatility is also undermining any prospects of growth that the economy might have had, as it will definitely keep away foreign investors who normally prefer a stable economic environment.

As Patriots for Economic Progress, we wish to take this opportunity to remind the Zambian people to judge the PF government on the basis of the economic hardships that they have been experiencing for the past 5 years as well as the hunger they feel in their stomachs. The electorate should not be misled by these last-minute antics by the government, regardless of whether such antics take the form of sudden and unexplained appreciation of the Kwacha, debt swap, or commissioning non-functional power generation plants,” Tembo stated.

He further stated that it was evident there would be no limit to the acts of desperation that the PF and its government would engage in to window-dress their poor performance for the past five years.

“Indeed, the PF and its government are extremely desperate in their quest for political survival, but the electorate must not allow themselves to be hoodwinked into believing that the economy which has been performing extremely poorly for the past 5 years, has suddenly turned around only days before Election Day,” stated Tembo.

26 COMMENTS

  1. the temporal leave thieving ministers has attributed to temporary appreciation of kwacha. let or allow the same people to go back you will see

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  2. Very small ambition these PF chaps have, we want the dollar to come to K10, that’s when we can say it has appreciated, from K22 to K21 ati it has appreciated, what is that surely, even celebrating, very small dream

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  3. This summarizes it all
    ” ….. we are fully aware of the fact that as we draw closer to the 12th August 2021 general elections, the PF and its government will become more and more desperate and will try to present a cosmetic view of the performance of the economy. This is evidently intended to misled voters so as to create a false perception that the economy is on a path of recovery when in fact not,”
    Period.

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  4. How can this be called appreciation, clearly stage managed. No change in the fundamentals what so ever, the fear of HH taking over is propping up the Kwacha

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  5. This is bona fide evidence of how inept and downright useless the opposition is. Always looking for reasons to make the incumbent party look bad so that the electorate can sympathize with them and vote for them. Since 2015, PeP have no strong manifesto and alternative policies to convince voters. They have no councillors or ward chairs or party structures except Sean’s briefcase where he sends social media messages like these….

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  6. They will kelenka everywhere. Very shameless Group D pupils. Now the Kwacha will end up with two left shoes…

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  7. The all kwacha appreciation is phony, it’s the work of foreign countries that support the current puppet Zambian government.

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  8. EVERY THING ABOUT THE PF IS PHONY NOW
    EVEN SUSPECTED FUEL PRICE COMING DOWN
    ZAMBEEF TOLD TO WITHDRAW PRICE INCREASE FOR 26th JULY TILL AFTER ELECTIONS
    A PUBLIC COMPANY BEING THREATENED FOR PF POLITICAL GAIN
    IS THERE NOTHING THEY WONT DO ???

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  9. You can hardly tell whether Sean is coming or going. The guy rubbished the ERP that the President launched last year of which the main driver is increase in the copper prices leading to steady increase forex inflows and the reserves.Sean should also know the bumper harvest has led to increased exports of maize and other crops. Govt commitments to projects like Kasungula are no longer being met due to completion of the project and the hydro power must have added to the export since the kariba is now full. The sentiments regarding the immernent bailout package by the IMF and generally peaceful atmosphere around the elections has stabilised investor confidence as well as panic selling of dollars by people knowing that the appreciation of the Kwacha is likely to continue given the factors l…

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  10. have alluded to. The only thing l agree with is that BOZ must intervene to manage the appreciation so that it does not cause damage to exporters and those that bought it at a higher rate. Otherwise strong fundamentals are in support of a strong kwacha going forward.

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  11. Sean Tembo has tried to make an argument. Did the central bank sell US dollars to prop up the kwacha last week? This question can be verified by Sean Tembo instead of engaging in speculation. Currency volatility is a characteristic feature of soft currencies such as the kwacha in the event of any inflows or outflows of foreign currency because of the shallowness of our foreign exchange market. If Tembo is doubting this, let him drop a stone of the same weight in a small bucketful of water and a big bucket with the same force. There has been an inflow of foreign currency in Zambia and the kwacha has appreciated instead of holding firm at the same rate. There’s no magic here. It’s just typical behaviour of a small economy with a small foreign exchange market and a soft currency.

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  12. A caring govt does exactly whatn PF is doing. Soon we will be seeing fuel prices coming down, prices for foods coming down , more money back in the hands of the civil servants, More doctors , teachers and nurses being employed . There is electricity available and good roads in place. PF has laid the foundation for growth and industrialisation. I WILL VOTE PF!!!

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  13. You know that guy who is so poor that he cannot afford a suit? He has been trying for 10 years to get the girl he loves, but the girl knows that she has no future and financial security with this loser. One day he realises that he must woo this girl. So, he borrows money to buy a suit. Goes to a friend and borrows a car. He is intending to propose on 12 August 2021. I hope the girl will not be deceived by the sudden good dressing and motoring.

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  14. UPND are just as paranoid as their cadres. You have been told several times to stop referring to your outdated text books. Move on with the times. You have no experience of running economic affairs of a country so what qualifies you with your knee jerk reaction?

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  15. What appreciation? Do currencies appreciate in a vacuum. These tricks wont work, the undecided voters are only zero point zero zero zero zero zero zero zero something, the rest are decided.

  16. Clearly fake appreciation, Zambians are very happy that this trickery is coming to an end in the next two weeks.

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  17. Here on the Copperbelt, PF campaign vehicles playing loud music in compounds, this not how you campaign, this is noise pollution and you are just annoying the people because already here you are not wanted here

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  18. Oh you noticed the volatility of the Kwacha now? Where were you during the last six years when the Kwacha depreciated from 4.5 to the $ down to 23 to the $? Hiding under a rock?

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  19. The only people to benefit from this intervention of the kwacha are foringers as most shops are in the hands of foringers, and they have bundles of kwacha to now buy the cheaper dollar…….

    Other beneficiaries are of course PF and their egos…….

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  20. This is no rocket science…purely stage managed…just like Lungu manipulated the constitution….technically he is not eligible to stand as a President…and deep down in his heart he knows it…I hate liars and maniputers….Lungu is a bandit President and when he was a Lawyer he swindled a widow

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  21. @Spaka #21 you meant foreigners. Yaba at foringers. Honestly you can not even try to proofread your posting. Wow.

  22. He is very right. Zambia is an investor economy so fluctuations of the currency are of concern by those wishing to invest. BOZ needs to stabilise the currency not to over strengthen it.

  23. remember how upAndOWN negatively described the re-basing of the Kwacha.Also bill 10, the road development, the creation og new districts.All these to them is nothing.What type of leadership is this? Appreciation must be shown where it is due. Some people are even comparing to there time when they had debts.But show us the development you made!! VIVA PF, VIVA ECL!!

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