ZAMBIA’S KWACHA IS THE WORLD’S BEST PERFORMING CURRENCY

ZAMBIA’S KWACHA IS THE WORLD’S BEST PERFORMING CURRENCY

Zambia’s currency, the Kwacha, has extended its rally into 2026, appreciating nearly 10% against the US dollar since early December 2023, following a directive from the authorities that restricted foreign exchange use and encouraged companies to convert dollars into local currency.

On Monday, the Kwacha surged almost 4%, marking its largest single-day increase since October 2023, and reached a two-year peak the following day.

Market experts indicate that this uptrend was driven by sellers offloading dollars due to anxiety surrounding the central bank’s currency directive issued on December 26, 2025.

Additionally, corporations contributed to the Kwacha’s strength by converting foreign exchange for settling tax obligations and funding operations for the new year.

Contributing factors to the currency’s rise also include soaring copper prices and the recent introduction of yuan-denominated mining tax payments, which began in October.

On the London Metal Exchange, three-month copper futures climbed by up to 4.98% to a record price of 13,090 per ton. Zambia ranks as Africa’s largest copper producer, following the Democratic Republic of Congo.

The Zambian government anticipates that the yuan will be used in 15% of mining tax settlements in 2024.

Furthermore, Zambia’s credit markets have benefited from this rally, with dollar bonds due in 2053 rising by 0.74 cents to trade at 71.51 cents on the dollar as of Tuesday afternoon in London.