⬆️ MARKETS BRIEF | Stronger Kwacha Linked to Mining Flows and Policy Stability
The Kwacha has continued its upward trajectory, trading around K21.70 buying and K22.13 selling against the US dollar, driven largely by increased foreign currency inflows from mining exports and improving investor sentiment.
Trade analyst Gilbert Nkamba told ZNBC that elevated copper output has lifted dollar supply and strengthened Kwacha demand. Zambia’s mining sector has been scaling up output following policy certainty and renewed investment commitments, a shift that has bolstered export receipts in recent weeks.
President Hakainde Hichilema has made mining stability and predictable policy the anchor of his economic programme. Analysts say sustained production gains and continued capital inflows from large-scale projects will remain critical to maintaining pressure on the currency’s recovery path.
Fiscal restraint has also played a role. Nkamba pointed to disciplined public expenditure and softening inflation as reinforcing factors. Zambia’s annual inflation eased for a second month in September, with food inflation dipping from 14.9 percent to 14.6 percent. Lower food-price momentum is particularly important in a consumption-driven economy where household spending shapes confidence.
Economist Chimuka Matongo added that the Kwacha’s appreciation cannot be traced to mining alone, noting that improving market sentiment reflects confidence in the broader policy framework. Bond auction results in recent weeks have shown firmer demand, and offshore investors are slowly re-engaging in local debt markets as clarity on restructuring and fiscal management improves.
Market watchers caution that sustaining the Kwacha’s gains will depend on continued export flows, tight monetary policy, and stable external conditions. Seasonal demand cycles and global copper price swings remain key watch points. But for now, a firmer currency and slowing inflation signal a macro environment that is stabilising after a volatile period.
© The People’s Brief | Christy Lilu