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The Zambian kwacha has appreciated by more than 17 percent against the United States dollar since the start of the year, making it Africa’s best performing currency, according to the latest Access Bank Group market commentary.
Analysts attributed the strong performance to improving economic fundamentals, including sustained copper export earnings, progress in debt restructuring and the Bank of Zambia’s currency directives, which have significantly reduced domestic demand for foreign currency.
The directives require local transactions to be settled in Kwacha, helping ease pressure on the foreign exchange market.
“Zambia’s foreign exchange reserves rose to US$6.2 billion at the end of the first quarter, equivalent to 5.2 months of import cover, providing a strong buffer for the economy,” Access Bank noted.
Read more: Kwacha ranks as Africa’s best performing currency in February
Meanwhile, copper prices surged above US$14,000 per tonne on the London Metal Exchange on Tuesday, edging closer to the all-time high of more than US$14,500 recorded in January, amid tightening global supply conditions and recovering demand from China.
The rally, however, unfolded against a backdrop of rising geopolitical uncertainty after United States President Donald Trump warned that the Iran ceasefire was on “life support,” raising fears of renewed instability in the Middle East and its impact on global markets.
The ongoing Iran conflict had disrupted global sulphur supplies, reducing the availability of sulphuric acid, a key chemical used in copper leaching operations.
The commentary noted that the development poses a greater challenge for the Democratic Republic of Congo (DRC), whose mines rely heavily on imported acid, unlike Zambia, where copper smelters produce sulphuric acid as a by-product of processing sulphide ore.
Planned extended maintenance shutdowns at two of Zambia’s largest copper smelters later this year will further reduce the acid surplus that Zambia typically exports to the DRC, amplifying regional supply pressures.
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