Dear editor,
US Dollar has at the moment only one key prominent source of supply and this is the bank of Zambia, this is mainly due to the weak activities or position emanating from the export sides, so right now we have a huge demand for US Dollars coming from importers, who are trying to clear some goods with ZRA while at the same time others are buying goodies meant for Christmas, and we have an end of year expenses dishing out as well particularly from companies / NGO’s to finish off their 2021 budgets so that they avoid less funding for next financial year of 2022.
So in short, October each year since Zambia is an import-driven country, the US dollar has a high level of engagements on the sides of its demand in order to meet up import requirements which is currently coming right now, and in few weeks from now, as this entirely runs up to December.
As long as we keep importing commodities without pushing for industrialization agenda, this trend will never stop if anything am even worried on the inflation development, as Kwacha keeps on depreciating presently, just today its lost something about 10 ngwee. One other key issue is how the executive leadership within the functions of government are handling the issue of national debts and each time they announce anything about this debt issue, the market keeps on reacting, so I suggest this should also be done in a systematic model to avoid shocks.
So, it is anticipated that this month of October has purchasing officers in various agents of the economy making some relatively reasonable transactions partly for festival goodies as earlier indicated particularly with the retail sector playing a high card on this trend together with others, and we will definitely expect the manager’s purchase index likely to shoot up in terms of percentage in value terms.
Though, the immediate impact is more likely to be on inflation as a first case, and secondly the exchange rate has shown little survival points but there are possibilities of having it trade in range bound if sufficient support comes from copper tax receipts around December and part of January 2022, though the biggest worry is right in February and March due to seasonal demands for food stuff.
KELVIN CHISANGA
Author
