Dear Editor,
THIS business week has seen Zambia’s Kwacha trading in low enthusiasm without the much-needed stamina but it is trading on an unstable mode pivoting on a bad balance and scale against the US Dollar.
No wonder the local currency failed to signpost anticipated positive movements as the market was mainly seen subdued by the high levels of participation mainly from the buyers and importers who have triggered high demand for the green currency on the local scene coupled with very low activities from the export sides despite having very attractive copper prices.
The Kwacha was anticipated to be starting becoming firmer this time around as we face this global health crisis, and hopes were also emanating on account of successful hosts of the treasury auction bills that could have seen good uptake in subscriptions though most of the treasury bills are under subscribed owing to a number of economic uncertainties.
The other problem being the number of speculators in the economy who have rendered Kwacha’s performance in weak spots marked by our poor trade fundamentals especially on the export side which is not striking a good and ideal balance within the Zambian economy.
As mentioned, we have some part of speculators within this economy who are hoarding US Dollars due to the destabilisation of China’s manufacturing system, they are anticipating a huge loss to be faced on their businesses so this act being practiced is basically one model towards sustaining on their safety net to cushion on the US Dollar impact globally.
On the other hand, we may likely see the Kwacha surging up on account of a huge importer drive as we head towards general elections since most of political campaign materials will be imported pretty soon. Meanwhile, the domestic currency may also likely continue seeing its quarterly-end backdrop of Dollar conversion from players who are committed in meeting up on their quarterly statutory obligations.
KELVIN CHISANGA.
