The Kwacha has continued to register some gains following interventions from the Central Bank.
The Bank of Zambia last week, injected 50.3 million United States dollars into the market, on Tuesday, February 6th, 2024, to save the kwacha from further depreciation.
According to the ABSA Bank Daily Report, Monday’s trading session posted some gains against the United States dollar as Bank of Zambia continued to support the market, which saw a significant drop in the corporate demand.
The report states that the market opened with the commercial banks quoting the local unit at K26.925 and K26.975 respectively, on the bid and offer, before appreciating to K26.900/ and K26.950 and closing the trading day at K26.825 and K26.875 on the bid and offer respectively.
“Near term, the Zambian currency is anticipated to trade range bound with the forces of demand and supply determining its next move,” the report indicated.
Meanwhile, Access Bank also confirmed appreciation of the kwacha against the United States dollar.
The bank’s daily report said the local currency rallied against the US dollar in Monday’s trading session with the currency being quoted at K26.850 against the U.S. dollar as at 13 hours, about 0.82 percent stronger than its previous close.
According to Access Bank, the Central Bank offloaded another 70 million United States dollars onto the market yesterday Monday, February 13, 2024.
“The Bank of Zambia offloaded USD 70 million onto the market, satisfying the majority of the built-up long- term hard currency demand, hence stimulating market activity and local currency appreciation. The kwacha is anticipated to extend its gains in the near term,” stated the report.
So the BOZ spent 121 Million US $ to save the Kwacha over the last week, that’s Zambian tax payers money (K3,303,300,000) that could have been better spent on housing, road , education and health to stop cholera, what a waste because in a few weeks it will start falling again, fix the problem so investors will invest in Zambia again and bring $$ to Zambia instead of the BOZ buying them.
@cosmo, it doesn’t work that way, it’s not cash but numbers.
Ask the rich man HH to pay for cleaning up Lusaka, he will tell you that cleaning requires cash. He has no cash.
If not cash then what is it? They have offloaded US dollars into the market obviously through trading platforms. The question is where did it come from? Was it from the reserves or it is borrowed money? Let’s say it is reserves, that’s not smart. We would celebrate such an appreciation if it’s augmented by growth in the productive sectors say copper prices improving on the international markets or growth in agriculture’s, mining or service industry. On the flip side, if the cheaper dollar is going to stimulate production then it’s commendable. We pray they got this, otherwise it’s cosmetic, the things lambasted PF about.
The problem with this intervention is that, its artificial and it difficult to sustain unless there is a working strategy that will enhance forex earning.
I could’nt agree any more with the people against this move, it practically makes no sense for a currency that has been weak for over years to just plummet in days so drastically. The rise will be so high we will not even feel the sun’s heat.
This money doesn’t solve the problem. When it is interesting for an investor to invest? When there aren’t much in-stable factors. One of the biggest in-stable factors is the government. So the government has to deal with that. People in government roles that enrich them selfs outside their salary should be persecuted by law. Just persecute some one old, how has a lot of money stolen from the people and let it flow back into the treasury. I am sure it will catch international investors interest.
When it is interesting for an investor to invest? When there aren’t much in-stable factors. One of the biggest in-stable factors is the government. So the government has to deal with that. People in government roles that enrich them selfs outside their salary should be persecuted by law. Just persecute some one old, how has a lot of money stolen from the people and let it flow back into the treasury. I am sure it will catch international investors interest.