PeP President Mr Sean Tembo has bemoaned the rapid gain of the Kwacha which has appreciated by approximately 15% in the past 4 days, as it will cause economic instability due to huge exchange losses that will be suffered by importers and exporters alike. He has appealed to the Bank of Zambia (BOZ) to intervene by buying dollars off the market so that the appreciation of the Kwacha can be gradual and not sudden.
He has further appealed to BOZ to do its job independently and professionally and not engineer an unsustainable appreciation of the Kwacha just so as please the incoming Government that they have brought investor confidence when in fact not as yet.
The PeP President further stated that “It must be noted that any appreciation of the Kwacha due to increased investor confidence would be gradual over a period of time. Given the sudden nature of this particular appreciation, it is more likely than not that it has been engineered by BOZ so that President-Elect Hakainde Hichilema’s prophesy of the Kwacha appreciating if he wins elections can come true, as a way of the BOZ Governor seeking favors from the incoming administration so as to protect his job”.
Meanwhile, the Bank of Zambia (BoZ) has remained tight-lipped over allegations that it has induced an artificial strengthening of the Kwacha. As of Friday the 20th of August, the Central Bank quoted the Kwacha as selling at 17.3120 and buying at 17.2620 per one US dollar respectively.
But, when contacted for comment on whether the Bank of Zambia (BoZ) has played a role in the appreciation of the Kwacha since the August 12th general elections, BoZ Assistant Director for Communication Besnat Mwanza said the Bank will make a comment during the Monitory Policy Meeting (MPC) media briefing next week.
Ms. Mwanza said the Central Bank does not make comments on such before media briefings. She said that the Central Bank is currently preparing ahead of the said briefing.
And Former Bankers Union of Zambia (BUZ) President Lucky Beene has argued that the strength of the Kwacha is due to the Hakainde Hichilema brand which has received positive sentiments.
To hoodwink him, that they seem to be working, so that he doesn’t fire them when assumes office tomorrow.
Another would-be economist – who’s party didn’t even get 1% of the votes – with a rid!culous explanation. And who has never heard of financial markets!
You guys accused Lungu of manipulation of the Kwacha because of elections….. please note that there are factors that affect currency. No amount of magic can make a currency strong because this will only result in shortages
This makes economics look more like voodoo. I thought the volume of trade, particularly exports, would determine the strength of a currency. Now we are hearing psychological factors of perceptions of a more market friendly incoming administration do also play a role in determining the strength of a currency! That the movement of some very impersonal thing like a currency can also be caused by perceptions of market players makes economics begin to look more like vodoo. It is clear western countries and the multinational mining companies that were more interested in having a UPND government in office were withholding their dollars and causing the strengthening of the dollar against the kwacha. They are also partly to blame for the high cost of imported commodities Zambia is heavily…
… dependent on and ultimately the prevailing high cost of living in Zambia.
Ati
I agree with Sean, this is the reality. Positive sentiment can account for maybe a K1 drop, beyond that, it is flimsy.
What is the definition of a soft currency, Sean Enock Tembo? Refresh your memory on exchange rate theory and international finance. U will realise that u’re drawing an innocent non-political institution into party politics for nothing it has done.
Sean is brainless do you if BOZ was involved they wouldn’t have done it before the elections…people like show don’t think this is a guy who wasted ECZ fees to get zero votes and building a 7 bed mansion when he has a small family.
LAST KICKS OF A DYING HORSE
There is no time for campaigning now reality should be the issue, some people are drank with campaign songs let us leave all behind and do the work we were voted for, cosmetics don’t last and in fact with time you may regret that your applied cosmetics.
When you apply makeup you look beautiful but you are the unpleasant person to look at, as the story goes your features betray you.
PF did so much damage that the exchange rate went into elastic mode. It wasn’t going to be long before it went the Zimbabwe way if those guys had stuck around. What you are witnessing is a relieved Kwacha gaining back its intended ground. Enough said.
Tembo you are very illiterate to modern economics……….
Have you ever heard of currency speculators and traders ????
Currency speculators are buying Zambian currency know HEHH will improve the economy…….
#7 Tarino.. are you forgetting that the Kwacha dropped from 22 to 19 weeks before the election? Didn’t people say what you are exactly saying now. Stick to one statement regardless of the situation. Even here on LT some columnist called the rallying of the Kwacha PF gymnastics. Personally I don’t mind in whose presidency the currency appreciates as long as it benefits the commons man.
Foreign exchange is speculative, no one can ever tell the future of whether it will fall or rise.
The high copper prices; the people who held the dollars are now offloading; the upcoming IMF cushion; expected liberalised economy; etc., have direct impact on the Kwacha behaviour.
BoZ has the same personnel, how do they cook figures for UPND?
The is much ignorance in Zambia…. i rest my case
Its very wrong to assume Zambia’s economy is in bad shape that’s just propaganda. You can’t have an economy that is bad yet ZRA collects above target in some cases over 100% of the target and reserves have been growing steadily over a couple of months. You can’t have an economy collapsing at the rate of 19/ dollar and inflation about 22%. With all the external factors especially covid where tourism sector was almost on zero forex inflows and challenges in the mines yet the economy showed signs of resilience isn’t a picture of a collapsed economy. Blame PF on cadrerism and corruption but certainly not on collapsing the economy. The economy is intact otherwise the statistics would have been worse than what you see that’s why the kwacha gained even before elections.
Perhaps this analogy would help. How does flying in a small aircraft and flying in a jumble jet feel regardless of the experience of the pilot? Think of a soft currency as a small aircraft and a hard currency as a jumble jet. Small aircraft are unstable in the air compared to jumble jets. That’s just the way it is and is the reason most soft currency countries hv exchange controls to protect their currencies from volatility.
#15 Mulongoti Machayi
August 23, 2021 At 12:41 pm
“Foreign exchange is speculative, no one can ever tell the future of whether it will fall or rise…….”
Not entirely true……..if there is talk of imminent USA sanctions against Iran being lifted , the Iranian currency will raise……
If a country announces the discovery of judge mineral deposits, the currency can pick on that news alone……
In zambia, news of the IMF funds after elections to stabilise the economy and recently the winning of UPND has led to the raise of the kwacha ……
I myself bought $5,000 worth of kwacha when it was at 22:1…….waiting for 15:1 to cash in……
This is why economics is a farce. You can attribute any explanation to any economic occurrence.. If Trump dies and the Kwacha picks up economists will find a thread between the two acts.
This is why economics is a farce. You can attribute any explanation to any economic occurrence.. If Trump dies and the Kwacha picks up economists will find a thread between the two acts Imwe bantu its witchcraft.
@Tallyban Bally, like it not, political happenings around the world do have an effect on currencies around the world. Even the non-significant one like the kwacha.
Music schools did not teach humanity how to compose songs and how to sing. But music theory taught in music schools helped to improve the music industry. The same with economics. Economists did not invent the economy. But the thinking of economists helped to improve economic management. Economics is not a farce.
TWO WEEKS AGO THE IMF DECLARED THAT THEY WOULD BE GIVING ZAMBIA SOME 1.4 BILLIO DOLLARS IN SPECIAL DRAWING RIGHTS.
THAT IS WHY THE KWACHA HAS APPRECIATED AS DOLLAR HOLDERS AND HOARDERS HAVE BEEN DUMPING THE DOLLAR TO BUY KWACHA IN ANTICICIPATION TO PAY LOCAL TAXES AND SALARIES/WAGES AND ALSO IN EXPEXTATION OF THE KWACHA APPRECIATING BECAUSE OF THE AVAILABILITY OF THE DOLLAR.
SIMPLE SPECULATION!!
TWO WEEKS AGO THE IMF DECLARED THAT THEY WOULD BE GIVING ZAMBIA SOME 1.4 BILLIO DOLLARS IN SPECIAL DRAWING RIGHTS.
THAT IS WHY THE KWACHA HAS APPRECIATED AS DOLLAR HOLDERS AND HOARDERS HAVE BEEN DUMPING THE DOLLAR TO BUY KWACHA IN ANTICICIPATION TO PAY LOCAL TAXES AND SALARIES/WAGES AND ALSO IN EXPEXTATION OF THE KWACHA APPRECIATING BECAUSE OF THE AVAILABILITY OF THE DOLLAR..
SIMPLE SPECULATION!!
Iwe sean ati ni investor confidence. Leka tumone ka kwacha kese pali one dollar aka US$1 to ZMW1.
Ba America baleisa mailo nafi dollar ifingi. Sammy ale fixer.
Ho ho ho ho ho ho.
The fixer is here.
@Observer might be on to something. Listen to HH speach again, he clearly says him and other investors have not invested in Zambia in the past 10 years. The real Akasaka ka ndalama, his personal money to holder affects our country. Black Excellence!!!
@Spaka #19. Thanks for your thought and for cashing in on your $5000. Keep offloading your dollars; we want it to saturate Zambia to reduce pressure on Kwacha. If SPAKA buys a currency and expects to sell at an appreciated rate later, he is speculating. In other words he is hoarding cash that must be in circulation.
Still, on the Iranian currency, the Rial, it is hard to say how much it will exactly be trading to USD in the event that ostracism and social-political penalties are loosened on that country.
There is no indicator right now that the ZMK/USD may reach 10:1 ratio sooner than later, it could even never reach there as projected. Speculative.
@Nemwine you are comparing Mangoes with Apples. Music is an art. Theory plays a miniature part in its composition. Economics claims to be a Science. Music theory can and has been introduced to an already existing artform just for orientation; to make people recognise or agree to stuff like genres among other things.. This theory doesn’t invent or dictate the art it just explains it. Economics is supposed to be dictated by scientifically proved formula and theories that enable us to predict certain economic happenings. In music you can sing or produce anything as long as people love it. In economics people dont have to love the prediction
I meant to say Theory plays a miniature part in its definition.
The Dollar has generally weakened bcoz the USA released alot of dollars meant to assist companies and individuals affected by Covid. Even in the USA prices of goods have gone up due to increased dollar in circulation. Iam not an Economist but it is strange that our Economists can see beyond Zambia and are busy misleading Zambians.
I strongly suspect that the Chinese have relaxed remittances till after the election period, Christmas we will dance chingande
The kwacha is a soft currency, don’t u forget that. And our economy is an underdeveloped one. So we hv not seen the last of the kwacha’s up and down movements.
@Tarino Orange
No name calling…Just argue using points.
The appreciation of the kwacha is as a result of the newly elected Preso
I recall when Sata won elections the kwacha lost its value.
Followed by no head of state visited Zambia (Nevers Mumba bemoaned)