The leader of Zambia’s opposition New Heritage Party, Chishala Kateka, has called on the government to explain the recent fluctuations in the country’s currency, the Kwacha. Speaking to reporters on Monday, Ms. Kateka expressed concern over the sudden appreciation of the Kwacha, which she said had not been adequately explained to the public.
According to financial analysts, the Kwacha has demonstrated overall stability for two consecutive weeks, with the local unit appreciating against international currencies such as the US dollar. This has been attributed to improved US dollar supply on the interbank market against limited demand for the greenback. Last week, the Kwacha appreciated by 1.1 percent, the highest rate in the last eight weeks.
However, Ms. Kateka warned that the one-off interventions would not sustain the exchange rate at an adequately low level, and called on the government to embark on economic activities that can generate adequate foreign exchange for the nation if the low exchange rate is to be sustained. She also emphasized the importance of sharing information regarding the cause of foreign exchange rate movements, which would enable the business community to make informed decisions.
In response to Ms. Kateka’s concerns, Dr. Patrick Chileshe, an economist, explained that the low demand for dollars on the market, coupled with the Central Bank’s increased supply of the greenback since the recent appreciation of the local unit, had contributed to the Kwacha’s recent stability. He added that this week, the local currency is expected to be more stable with a minimal appreciation rate of about 0.5 percent.
As of Tuesday, April 12, 2022, the US dollar was buying at K17.39 ngwee and selling at K17.74 ngwee. Despite the recent stability of the Kwacha, Ms. Kateka has warned that her party will only celebrate the lowered exchange rate when it understands the reasons behind the recent fluctuations.