By NATION REPORTER
ECONOMIST Emmanuel Zulu says the appreciation of the Kwacha is artificial and that there will be a sharp depreciation in the long run.
Mr Zulu said the intervention by the Bank of Zambia to increase the Monetary Policy Rate had mopped up dollars in circulation which had helped the local currency to appreciate.
In an interview, he said the appreciation of the Kwacha can only be sustainable when the foreign exchange was being generated through trade.
He said unfortunately, the government was not able to generate the foreign exchange on the market which disadvantages the local currency.
“What we are having is the intervention of the central bank among other factors, the Monetary Policy Rate has been raised, the Statutory Reserve Rate has been increased by nine percent, something which has not happened in the long time, so that is quite huge.
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