Kwacha strengthens further on the back of improved foreign exchange supply

The Zambian kwacha extended its gains on Monday, supported by improved foreign exchange (FX) supply and sustained market confidence.

According to Access Bank group’s Daily Market Commentary, Bloomberg data showed that the kwacha appreciated by around 0.41 percent against the US dollar, marking a continued strengthening trend.

Last week, the local currency recorded its third consecutive weekly gain, driven largely by offshore market participation, onshore corporate conversions to meet quarterly tax obligations, and support from the Bank of Zambia.

Access Bank noted that, on a month-to-date basis, the Kwacha ranked among the top-performing African currencies against the US dollar, appreciating by 0.63 percent, as tracked by Bloomberg.

Meanwhile, in global foreign exchange markets, the US dollar is regaining its safe-haven appeal—not because of domestic economic strength, but due to increasing political and policy challenges in other major economies.

In Europe, investor sentiment has been dampened by renewed fiscal uncertainty following the resignation of French Prime Minister Sébastien Lecornu, which has left key budget reforms in limbo and raised doubts over the passage of the 2026 budget.

Similarly, in Japan, expectations of continued ultra-loose monetary policy under incoming Prime Minister Sanae Takaichi have weighed on the yen, limiting near-term optimism.

“Against this backdrop, the dollar benefits from relative stability, reinforced by sustained global demand for US assets,” Access Bank observed, adding that the greenback may be “poised for a short squeeze as investors seek refuge amid Europe’s fiscal paralysis and Japan’s dovish stance.”

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