ZAMBIA 🇿🇲: Over-appreciation of the Kwacha against major convertible currencies would hurt the local economy – Finance Minister
Minister of Finance and National Planning says the appreciation of the Kwacha has clear limits and must be managed carefully to protect the country’s economic stability.
The local unit has continued performing strongly, trading around 18.23–18.58 against the US Dollar as of today, February 17, 2026.
Speaking on the performance of the local currency, Dr. Musokotwane Situmbeko cautioned against expectations of the Kwacha gaining strength to the extent of reaching parity with the United States dollar, as such a scenario would be unrealistic and economically destabilizing for Zambia.
He explained that if the exchange rate was to reach one Kwacha to one US dollar, it would distort incomes and purchasing power in a way that does not reflect Zambia’s economic realities.
Dr. Musokotwane was speaking during the joint FNB Zambia and American Chamber of Commerce in Zambia Economic Review Breakfast in Lusaka today.
“Imagine for a moment that we got to one Kwacha equal to one dollar, with your salary of, say, K20,000 per month, in one go, your salary is worth US$20,000 per month. That would be a very strange country because there are not many countries in this world where you have a salary of 20,000 dollars per month,” he said.
Dr. Musokotwane noted that such an appreciation would trigger excessive demand for foreign currency as consumers rush to import goods, quickly depleting US dollar reserves.
“Knowing us in Zambia, everyone now wants to import Mercedes Benz so what happens next? Of course, we go to the banks to say, I want US$100,000, US$20,000 to buy a Mercedes Benz , and very quickly, the dollars run out,” Dr. Musokotwane stated.
He added that exporters earning foreign currency would also be negatively affected if they were forced to convert their earnings at an artificially strong exchange rate.
Dr. Musokotwane stressed the need for the country to balance the interests of importers and exporters while maintaining overall economic stability, and commended the Bank of Zambia for managing the foreign exchange market under a liberalized system.
He further emphasized that Zambia’s long-term prosperity depends on expanding exports rather than relying on domestic consumption alone.
Credit: Money FM