5 February 2013

Zambia: Falling Kwacha Worries Government

Government has acknowledged the depreciation of the kwacha and is working out modalities to strengthen it in order to compete well against other major foreign currencies.

Finance Deputy Minster Miles Sampa said that the Kwacha is expected to standout fairly and stronger considering an increase in the exportation of oil which is mostly the commodity on high demand by the developed world.

Sampa noted that Zambia had a positive trade surplus from KR112.8 million in November last year to over KR135 million in December 2012.

He expressed confidence that it is imminent that the introduced Rebased Kwacha will stabilise for a much longer period.

The Finance Deputy Minister who attributed the instability of the kwacha against other foreign currencies explained that most commercial banks have been holding on to the Dollar thereby putting more pressure on the kwacha.

Sampa urged Commercial banks across the country to work towards addressing the weakening of the Zambian Kwacha saying if this is not sorted out it will cause hostility for business transactions for persons in the entrepreneurial sector.

He said that financial lending entities should realise they have a part to play in the currency market exchange rate by making sure the exchange rate is made much ideal for the local currency.

Various financial players in the economy have expressed concern with the recent depreciation of the Zambian kwacha and asked government to intervene.

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