28 January 2017

Zambia: Kwacha Gain Is Real!

Photo: Zambia Reports
Police at a polling station in Zambia (file photo).

As Zambia enters 2017, there is great promise on the Kwacha competing favourably with the Dollar though some people feel the local currency appreciation is cosmetic.

Despite the Bank of Zambia (BOZ) maintaining that the appreciation of the kwacha is due to measures that the central bank had employed rather than what critics are putting across, there are some Doubting Thomases .

Some media reports have suggested that the appreciation of the Kwacha against other major currencies is artificial and cannot be suntanned for a long period time.

However, BOZ Assistant Director, Balance of Payments and Debt Division, Economics Department Ivan Zyuulu told Journalists in Lusaka recently that during this period it is normal for the Kwacha to perform extremely well because this is the time that companies pay their taxes.

Mr Zyuulu said it is also during this time that mines remit their taxes coupled with the increase of interest rates in the country.

He said the appreciation of the Kwacha is also as a result of the measures that the bank has put in place to address and control the situation.

Mr Zyuulu said the central bank is currently monitoring the performance of all the bank's departments in concerted efforts to stabilize the kwacha.

He said BOZ has a task to ensure that financial stability is maintained for a longer period of time in order to improve the economy.

Mr Zyuulu said BOZ has put in place monitory policies in order to increase the interest rates because data is usually collected on the interest rate to see where adjustments can be applied.

He said BOZ has a task to ensure financial stability in the country and to ensure that all players in the economy have a levelled playing field.

The truth is the Kwacha is headed for tremendous recovery and would stabilize solidly to be pitted with other foreign currencies.

We are waiting to hear what the noisy prophets of doom will be talking about now, since one of their favourite subject of the Kwacha underperforming is adequately being addressed by the Government.

The intervention by the government to stabilise the Kwacha has borne positive results with the Kwacha continuing to appreciate aggressively against the United State (US) dollar with our local currency hitting K9.7767, extending its bullish run to six successive days.

The other heartening aspect to celebrate about is that the local currency has continued to show this resilience against the greenback with financial experts predicting a bullish trend over the next one week.

Can't all patriotic Zambians unite in celebrating this turn of events in a country which has witnessed a clique of doomsayers and other economic Sangomas only relishing on bad news?

The so called underperformance of the Kwacha has become a favourite subject that is debated freely by arm chair economists especially on social media.

Despite sharing ignorance with the masses, our know-it-all economists have soldiered on commenting on a subject that they don't understand.

Last year when the Kwacha appreciated significantly some economic analysts attributed the appreciation to President Edgar Lungu's assurance to both international and local markets that he was taking measures to fix the economy.

Other respected analysts attributed the appreciation to the move by mining firms and other companies to buy the local currency to meet month-end obligations such as paying salary and taxes.

At one time Zambia's Kwacha weakened by around 90 per cent between August and early November last year but has rallied in the following two weeks after the Central Bank began selling US dollars.

All these are clear indicators that President Lungu and the Patriotic Front (PF) Government are working round the clock to ensure the Kwacha remains in the one figure digit range.

All this is being done amidst a cacophony of negative comments from some opposition members who have made the Kwacha a favourite subject to comment on.

Then we have some business houses that have been insincere with the reasons they give for increasing prices of commodities even when the Kwacha appreciates.

These unscrupulous people have used the currency to increase commodities even when the Kwacha is appreciating against the US dollar.

However, it is the doomsayers from the opposition who constitute the most callous group of Zambians whom we should blame for spreading lies on the Kwacha with the view of making President Lungu and the PF unpopular.

Led by some high priest of liars in the opposition, this group of fault-finders is on the war path for any negative aspect real or invented to tarnish the image of the Government.

For once we want them to say something positive about the appreciation of the Kwacha which everyone (economists and laymen) can see for themselves.

Together with load shedding and unemployment, the underperforming Kwacha has become a favourite subject for the wolf pack to talk about.

It is only surprising that this group has little sense of shame since it keeps quite when these subjects are addressed positively.

As things stand, even as I see it, we want to hear what this group will say since the Kwacha appreciation is quite significant and deserves positive comments.


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