Kwacha crosses K22 barrier against dollar, despite confidence debt restructuring would bring relief

Despite economic and currency speculators being bullish about the rebound of the Kwacha against major convertibles, the local unit has breached the K22 psychological barrier against the United States (US)Dollar.

Sampled bureau de change across the Copperbelt towns by the Zambia Monitor on Wednesday showed the local unit trading between K22.2 and K22.40 buying and selling respectively on average.

According to the Absa Zambia daily indicative rates, the Kwacha against the greenback was in the region of K21.57 and K21.99 in that order.

On the other hand, ZANACO indicative rates showed that the Kwacha was heading for further weakening as demand was anticipated to persist.

ZANACO pegged the Kwacha at K22.54 and K21.97 buying and selling.

The announcement by the Zambian treasury that the copper rich South-central African country had signed a Memorandum of Understanding with official creditors, gave a reason for economic commentators that the move would trigger improved foreign exchange.

Read more :Dollar demand slumps, as Kwacha expected to appreciate, driven by month end obligations by large firms

Economic Freedom Fighters (EFF) leader, Kasonde Mwenda, in statement on Wednesday said they were deeply concerned about the recent sharp depreciation of the Kwacha against major convertible currencies, particularly the dollar, where it is now trading at an alarming rate of US$1 equivalent to K22.

“This economic downturn stands in stark contrast to the promises made by the current United Party for National Development ( UPND ) regime in 2021 to stabilize and appreciate the Kwacha,” Mwenda said.

He feared that the rapid depreciation of the Kwacha threatened to erode the purchasing power of the citizens, making it harder for them to meet their basic needs and stifling the economy.

A weaker Kwacha, he said could lead to inflation, raising the cost of goods and services, which further burdens the people.

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