Despite recent fiscal and monetary policy measures including revising the Commercial Bank Reserve Ratios, Kwacha against the United States Dollars is now trading at K23 Kwacha.
This is the highest depreciation in the post Covid-19 era.
Sampled bureau de change across the Copperbelt towns by Zambia Monitor on the morning of Thursday showed the local unit trading between K22.99 and K23.30 buying and selling in that order.
According to Absa Zambia daily indicative rates, the Kwacha against the greenback was in the region of K22.57 and K23 buying and selling respectively.
Meanwhile, ZANACO has stated that in the absence of healthy dollar inflows, the local unit was likely to weaken further.
“The Zambian Kwacha added to its previous days of losses against the Dollar on Wednesday as sustained dollar demand from larger companies and other merchandising firms characterized the market,” the bank said in its Thursday Newsletter.
It stated that at 08:30 hours, when the market opened, local banks posted the Kwacha at K22.55/22.
By midday, the Kwacha was at K22.60/22.65 and stayed at these levels until close of business.
According to a circular signed by Central Bank Deputy Governor for Operations, Francis Chipimo, on November 5, 2023, all minimum statutory reserve ratio on both local and foreign currency deposits, including government and Vastro deposits, would be increased by three percentage points to 14.5 percent from 11.5 percent.
Although not sustainable given that such monetary instruments had been used before, analysts believe that the measure would see the Kwacha depreciation being tamed in the short term.
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