People’s Pact presidential candidate Fred M’membe has welcomed the continued appreciation of the Kwacha, describing it as positive news for Zambia, while cautioning that extremes in either direction could be harmful. Commenting on the performance of the local currency, Dr M’membe said the strengthening of the Kwacha must be carefully managed to avoid negative effects on key sectors of the economy, particularly exporters and local manufacturers. He explained that Zambia’s economy comprises two main groups—exporters and importers—who are affected differently by movements in the exchange rate.
“Exporters lose in Kwacha terms when the Kwacha becomes too strong, while importers benefit from a stronger Kwacha. The reverse also applies,” he said. Dr M’membe said the government needs to conduct a thorough analysis of the economy to ensure a balance that benefits both exporters and importers.
He stressed that such a balance is essential to keep both groups in equilibrium with regard to the exchange rate. Addressing exporters whose revenues are earned in United States dollars while costs are incurred in Kwacha, Dr M’membe warned that rapid appreciation of the local currency could significantly reduce profit margins. On imports, he noted that a stronger Kwacha helps lower the cost of imported goods but cautioned that it could negatively impact local industries.
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“This same gain can undermine locally manufactured goods when it becomes cheaper to import than to produce locally,” he said. Dr M’membe warned that poor management of the situation could lead to factory closures and increased reliance on imported products. Meanwhile, the Zambian Kwacha recorded strong gains this week against the United States dollar.
Interbank market rates show the Kwacha buying at K19.92 and selling at K20.00 per US dollar. The Zambian Kwacha is simply driven by the copper pricing on the London stock exchange, currently the price of copper is above $13000 /tone so far the highest in Zambian history and this demand has been caused by technological advancement such as: Electric cars, artificial intelligence etc. The last time the copper price was this high was the time when Mwanawasa was President by then it was above $12000 /tone and the Kwacha used to trade at K2.5 against the USD. so there is nothing to get excited about so what we need to do as the country is to consolidated our industry especially non-traditional exports such as agriculture, electricity especially that we have a lot of resources in these sectors
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