Sunday, May 26, 2024

Kwacha Hits Record Low Against US Dollar Amid Economic Challenges

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kwachaThe Kwacha, plummeted to a historic low against the US dollar on Wednesday, reaching 27.30 to the dollar. This significant depreciation comes amidst a backdrop of hard currency shortages and a devastating drought that has triggered power cuts across the nation.

According to data from the London Stock Exchange Group (LSEG), the Kwacha has shed nearly 5% of its value against the greenback since the beginning of the year, and a staggering 17% in the past six months. The currency’s previous low was recorded at 27.23 on February 6.

The recent depreciation of the Kwacha is attributed in part to a severe drought that has ravaged crops in Zambia, compelling the country to increase its reliance on food imports. Additionally, critically low water levels in Zambia’s hydropower dams, responsible for generating 85% of the nation’s electricity, have led to plans for heightened electricity imports, further exacerbating pressure on the local currency. Moreover, heightened demand for dollars to facilitate the importation of petroleum products has intensified the strain on the Kwacha.

This downward trend in the value of the Kwacha is not a recent phenomenon. Over the past decade, the Zambian currency has experienced a depreciation of more than 300% against the US dollar, reflecting persistent economic challenges and vulnerabilities.

The latest depreciation of the Kwacha underscores the urgent need for policy interventions to address the underlying economic issues facing Zambia. As the country grapples with the consequences of the drought and currency depreciation, policymakers face the daunting task of implementing measures to stabilize the economy and restore investor confidence in the Kwacha.

17 COMMENTS

  1. Mr President,
    I have the panacea to solve these problems, namely:
    1) Revegetation along the banks of the Zambezi River to restrict rainfall water from flowing uncontrolled into the river. In so doing, I hope to recharge the water table which will feed the river during the dry season.
    2) Resurrect agricultural activities in Kafubu Block and Miputu to feed the entire Copperbelt, and
    3) Using a fleet of 10x45hp tractors per district, restore the soil structure to retain more moisture by ploughing back stubble and vegetation into the soil
    I AWAIT YOUR CALL SIR.
    Your humble servant

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    • Mr. Seeker of truth Zambia is looking for solutions not jokes. This man has suggested some solutions what it matters whether he has a PHD or he is a high school drop- out, this is the problem with Zambians we shop for papers not practical solutions. Please grow-up Mr. Seeker of Truth

  2. We allow the West (The so called first world countries) to come steal our natural resources due to corrupt leaders ….and the West is becoming more richer while all the African countries are becoming more poorer except for our Politicians and their families….The west is only rich because of our Natural resources which they’re stealing from us using puppet African leaders

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    • Yesterday I asked why was our Kwacha going South when our number one export, Copper was going North? LT have removed my post Iam therefore reposting it Can anyone tell me why the Kwacha has plunged while the Copper price is skyrocketing.

  3. One thing is for sure…. the strength of a currency does not depend on investor confidence. As an economist Mr Hakainde Hichilema should know that the status of our kwacha depends on what we export… and other than copper there’s almost nothing else we export…. now the production, treatment, smelting and selling of our God given commodity is shrouded in all sorts of mysteries. Offloading the dollar by instruction is very amateurish and very dishonest.

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  4. Its mind-boggling…we travel half universe to go and look for people to come and manage our natural resources worth trillions and trillions of dollar and we wonder why we are poor….they trick us by “postponing” our debt and we celebrate as if they’re doing us a favor but infact they’re killing our economy….very soon Zambia will become like Guinea or Niger where electricity is only for the Ministers and the President…..

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  5. Like i have said before, the world bank, imf and all these organisations are evil, stay away from them. Muzalila, you are being fixed, remember mr fix

  6. Bally is fixing … we misunderstood the fundamental meaning of the word pela. Now let’s go back to those threats we used against each other in primary school (some generations may not know). This is what is happening! “I will fix you!” is evident in this administration’s actions.

  7. Its not only the Kwacha….all African currencies ….imagine Nigeria with all the oil they have they cant afford to provide electricity….Electricity in Nigeria is now only for the corrupt Politicians and the rich…thats what corruption does….95% of Nigerians can only access Electricity for only 15 hours in 31 days…..

  8. From America and have been here 4 years..never had to deal with 12 hour load shedding.if this was America the president and government would just sign off on what loan needed to fix problem like power..people can’t survive with business with no power.cant keep food cold or go to a salon..get windmills,solar,whatever it takes or cost..get it done

    • True but America has the liberty of being able to print more money to quickly send to a problem area. Their money is what we are hungering for. If Zambia prints more money it will just weaken its currency because as an import economy we rely on foreign currency. It is foreign currency that will build the Lusaka-Ndola dual carriageway, the schools we need since we have declared free education, the hospitals etcetera

  9. My construction projects has now stalled because of loadsheding…. i need power for most of the works remaining…..the Carpenter has electric powered equipment….its now survival of the “corrupt” Ministers in Zambia…

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  10. If we put all our resources together as a continent…Africa can be the richest and strongest continent in the world…we have Physical strength…abundant natural resources…very intelligent and yet we cant find a solution to address Electricity and it’s because of our greedy Politicians….they make deals to only to fill up their pockets and benefit the West….From Cape to Cairo same nonsense…Namibia is following into zambia’s footsteps…they’ve been given 180 million dollars and they’re jumping up and down like Spaka did

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  11. WHATEVER IS HAPPENNG LETS PRAY THAT GOD GIVES US THE COURAGE TO PERSONALLY HELP OUR COMING GENERATION TO COPY IN A SOLO WAY BY EMPOWERING THEM WITH LIFE SKILLS…..FOR WE DONT KNOW WHAT THE FUTURE HOLDS FOR MOTHER ZAMBIA,NO MAN CAN CHANGE THIS PRIDICAMENT

  12. Farmers day it will be K30 to 1USD. Situmbeko has no idea what to do. HH just relying on him making matters worse. Never in the history of this country had kwacha gone to 27. Sometimes you should just put your hands up and say guys I need help.

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