ECONOMIST CHISANGA RULES OUT SPECULATIVE KWACHA RISE
Economist Kelvin Chisanga has ruled out the notion that the recent appreciation of the Zambian kwacha is driven by short-term speculation.
In a statement, Monday, Chisanga emphasised instead that it reflects improving foreign-exchange market conditions and a convergence of fundamental factors.
He stated that the movement of the currency from around K20.00 to approximately K18.70 per US dollar in early February represents meaningful strengthening, underpinned by real economic flows, balance of payments effects, and moderated speculative activity.
Chisanga remarked that stronger foreign-exchange inflows, particularly from copper export earnings, have been the key driver, with mining companies converting US dollars to meet local operational expenses.
The Economist observed that higher export receipts and improved repatriation of foreign earnings have increased the supply of US dollars in the domestic market, easing liquidity pressures and supporting a more orderly exchange-rate environment.
He explained that immediate demand for foreign currency has moderated, as the dollar has weakened, discouraging market participants from hoarding.
Chisanga said import pressures remain contained due to sufficient local supplies, while improved confidence has reduced precautionary and defensive dollar buying by businesses.
He said the imbalance between a stronger dollar supply and softer demand has mechanically supported the kwacha through trade dynamics.
Chisanga said that from a market perspective, the exchange-rate adjustment has been calm and technically supported, indicating staility rather than volatility.
He said the kwacha’s current performance reflects a convergence of improved FX inflows, trade-related dynamics, and strengthened market confidence.
The Economist emphasised that sustaining this trend will depend on continued export performance, disciplined fiscal management, and consistent macroeconomic policy implementation.