A strong Corporate inflow of U.S dollars in commercial banks has enabled the Kwacha to appreciate against major convertible currencies.
The Kwacha is trading at K8.95 and nine Kwacha on the inter-bank market.
The Zambia National Commercial Bank says it expects the Kwacha to continue its bullish run against the dollar on the back of sustained dollar supply.
ZANACO expects the Kwacha to continue trading within a range of 8-Kwacha 95 Ngwee and 9 Kwacha respectively.
And Copperbelt University Economics Lecturer Lubinda Haabazoka has attributed the Kwacha’s gains to both the Central Bank’s monetary policy and Government’s fiscal policy.
Dr. Habazoka says this saw the Bank of Zambia increasing reserve ratios and interest rates to react to a weakening Kwacha last year and the long term positive yields are beginning to show.
He says increased taxes have further reduced liquidity in the economy meaning citizens’ demand for goods has reduced translating into reduced imports as most of the goods consumed in Zambia are imported.
Dr. Habazoka says the Kwacha has also been boosted by the increase in copper prices as well as increased exports of agriculture produce.
And the price of Copper on the London Metal Exchange has dropped slightly to trade at 5-thousand 8-hundred and 45 U.S dollar per tonne.
This is down from 5,863 U.S dollar per tonne at the start of business on Tuesday.