Re-awakening Kwacha makes strides

THE continued strong performance of the Kwacha against the United States (US) dollar has triggered mixed reactions among Zambians. Since July 19, 2021 when US$1 was close to trading at K23.00, the local currency has been slowly but confidently fighting back against the US dollar until July 23 when it broke the barrier to trade below K21.00, as the market continues to witness inflows of the hard currency. Subsequently, the Kwacha posted gains trading between K19.00 and K20.00, as foreign exchange traders stayed on the fence waiting to see the local currency’s next move. This 13.6 percent appreciation of the local currency last month has resulted in making it the world’s best performing currency in the period tracked by Bloomberg. Although, one school of thought affirms that economic fundamentals are suitable to result in the appreciation of the local currency, the other contend that, an ‘invisible hand’ is at play to strengthen the Kwacha and tilt dynamics in favour of the party in government ahead of next week’s general election. Indeed, the Kwacha appreciation has sent scores of economic commentators into a frenzy of excitement, speculating about CLICK TO READ MORE

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