Financial experts back Lungu on forex

US dollars

FINANCIAL market analyst Maambo Hamaundu has welcomed President Lungu’s announcement that Government will not re-introduce exchange controls to cushion the sharp depreciation of the Kwacha against the United States (US) dollar because such a measure would erode investor confidence.
Mr Hamaundu said the announcement demonstrates Government’s commitment to allowing the forces of demand and supply to prevail.
He said reverting to foreign exchange controls could adversely affect the economy.
“There is no value in introducing foreign exchange controls because exchange controls make the country unattractive,” he said in an interview yesterday.
International Growth Centre (IGC) country advisor Robert Liebenthal observed that exchange controls are difficult to administer and they interfere with the market forces, hence the need to avoid introducing them.
“The problem with exchange controls is that they do not achieve the expected results but instead affect the economy…it is also good that the President has cleared the air on the issue,” Mr Liebenthal said.
Private Sector Development Association (PSDA) chairperson Yusuf Dodia also commended Mr Lungu for assuring the nation that exchange controls would not be introduced .
Mr Dodia, however, said the Kwacha has been depreciating against the dollar due to some exporters undervaluing revenue from exports.
“It is good that the President has made it clear that Government will not introduce foreign exchange controls.policy changes such as this one have a negative effect on the economy,” he said.

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