Zambia’s kwacha jumped the most since December 2019 as soaring commodity prices helped ease investor concerns about a debt revamp by Africa’s first pandemic-era sovereign defaulter.
The currency gained 5.1% against the dollar at 6.41 p.m. in Lusaka. It has advanced 13.6% this month, making it the world’s best performing currency in the period tracked by Bloomberg.
Zambia depends on copper for more than 70% of its foreign-exchange earnings, and sustained high prices of the commodity is helping boost dollar supply. Investors have also been lured by local currency bond yields of nearly 33%, with the expectation that the government will finalize a long-awaited deal with the International Monetary Fund after elections next month.
“We have seen now a number of offshore investors coming back into the market,” former Finance Minister Bwalya Ng’andu said at an election rally on Sunday. They are “playing a very active role in supporting the inflow of foreign currency.”
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