Kwacha resumes losing value

Kwacha resumes losing value

Screen Shot 2015-12-02 at 07.43.56Just like we reported last week, the Kwacha has started crumbling now that mining houses and other entities that were meeting tax and other monthly obligations have stopped buying the Kwacha.

The Kwacha resumed depreciating yesterday, December 1 2015, and has continued losing value today. At the Central Bank, where it is supposed to be the lowest, the Kwacha opened today at K10.39 per USD. In Most commercial banks, the Kwacha opened trading today, Tuesday, at K 10: 50 per USD Dollar. In most bureaux de change, where most Zambians exchange money, the Kwacha opened at K11: 00.

Last week, the Kwacha made some artificial gains against the USD due to mining houses that were paying retrenched miners and other companies that needed the local currency to pay salaries. The Bank of Zambia also pumped in more Dollars into commercial banks to try and keep up appearances.

According to most banks and economists, the true value of the Kwacha right now is K15, 000 (K15: 00 PF currency) against one USD. This is because right now there is no economic activity happening in Zambia. As long as the government continues trying to manipulate the Kwacha against its true value of K15: 00, the local currency will continue being unstable and affecting trade and production.

Most likely, after reading this article, the Bank of Zambia will release more borrowed Dollar, before State House starts phoning.

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