‘IMPORTS IMPACTING KWACHA PERFORMANCE’

By Lumbiwe Mwanza

THE Kwacha has continued trending on the path of depreciating owing to the fact that demand on import is still standing strong, Economist Kelvin Chisanga has observed.

Mr. Chisanga told the scoop that with the continuous upbeats in shadow supply of US Dollars on the local market, the Bank of Zambia had been left as the only primary source of supplies on the domestic market.

He said that Zambia’s currency structural movement was highly attributed to the raised demand strongly pressed on the base currency, as it was seen gaining some special momentum to wind up the year with huge import purchases.

“The local forex market has been largely characterized by some serious patterns of mismatch factors currently being observed in the supply and demand fundamentals. As supply looks to have been seriously subdued owing to the critical factors of hard currency supplies facing hardships in the domestic market, we are presently experiencing a low export profile and low production of mineral outputs amidst dramatic global fluctuations in copper market prices.

“The Kwacha is depreciating against the convertible currencies due to some import demands as the year is coming to an end such as holiday packages and Christmas goodies among others,” Mr. Chisanga said.

He however said that the local currency would however rebound but only on the condition that import should start recording low levels.

 He said that with this period of time where the country usually faced a strong dollar undertaking, something must seriously be done to avoid recurring issues each calendar year.

He said that the Kwacha vividly lost up on nominal values against the global reserve currency (US Dollars) due to the sustained demand pressure owing to import activities hence the need to find long term measures to address existing challenges.

He further said that the scarcity supply of hard currency on the local market was mainly attributed to a slow pace of economic participation being experienced in the domestic market by mostly exporters and that this was mainly caused by the corporate players especially the sellers and exporters.

He insisted that it would be ideal for Zambia to look at a typical sense of pushing economic transformative pillars of growth and strongly look at ways of anchoring stability with the exchange rate.