The Zambia Kwacha has started losing value after two weeks of false gains.
Driven by the Bank of Zambia’s discharge of US Dollars and other major currencies in the market plus the same BOZ’ withdrawal of the Kwacha from circulation, the local currency appreciated to almost K9 per USD, by last Friday.
The BoZ,’s withdrawal of the Kwacha from circulation coincided with the global weakening of the USD whereby most currencies around the world gained against the Dollar.
There was no production or other positive development in Zambia that could have caused the Kwacha to gain value.
But that artificial appreciation ended last Friday and the kwacha has started receding to its real value.
Today alone the Kwcha has depreciated to K9, 300 to a Dollar at ZANACO rates from the K8, 800 it had been trading in some bureaux de change.
At close of Business yesterday, April 18, the Bank of Zambia rates showed that one USD was selling for K9.22 but by the close of business today at 15: 30 hours, the Bank of Zambia rates show that one USD was selling at K9:27 (K9, 274 old currency).
Zanaco rates show that the kwacha closed business today at K9.30 (K9, 302 old currency) from the K9.29 per Dollar on Monday, April 18.
What this means is that the country will experience another uncertain in the local currency. An unstable currency is bad for any economy as it affects imports and exports and businesses can not plan properly. When the Kwacha depreciates, importers of foreign goods are affected because foreign currencies become expensive. When the Kwacha appreciates especially falsely like the past two weeks, local producers are affected as it becomes expensive to export and imported goods become cheaper than locally produced goods.
It is better to maintain a stable currency and the value of the Kwacha at the time is K15 per USD, according to market experts.
In fact for a country like Zambia that produces almost nothing apart from children, a weak currency is even better.