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The Zambian kwacha ended 2025 on a strong footing, extending gains against the United States dollar on the back of firm copper prices and improving investor confidence.
Bloomberg data showed the currency closed the year at around K22.17 to the dollar, underscoring a period of sustained strength in the final months of 2025. Analysts attribute the performance largely to elevated copper prices, which boosted export revenues and supported foreign currency inflows.
Market analysts say strong copper fundamentals, combined with growing confidence in Zambia’s economic outlook, are likely to continue supporting the kwacha in the early part of 2026.
However, they caution that risks remain. Persistent inflationary pressures, global economic uncertainty and the potential for sharp commodity price fluctuations could weigh on the currency in the months ahead.
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Elsewhere in the region, financial markets also recorded solid gains in 2025, with South Africa outperforming expectations.
Investors remain hopeful that the momentum in South African markets can extend into the New Year, despite lingering risks.
In its latest market commentary, Access Bank Group noted that while equity valuations in South Africa remain elevated and volatility risks persist, the fundamental conditions for continued market strength are still in place.
“With most market participants on holiday, trading activity is expected to remain subdued, providing an opportunity to reflect on the key themes likely to shape the rand’s performance in the coming months,” the bank said.
Access Bank added that geopolitical tensions between South Africa and the United States have had limited impact on market sentiment so far, but warned that certain sectors, particularly those linked to the African Growth and Opportunity Act (Agoa), face mounting challenges.
The bank also noted that South Africa’s closer alignment with BRICS+ partners, including Russia and Iran, as well as its legal action against Israel, had strained relations with Washington, developments that are expected to influence bilateral ties and market dynamics in 2026.
As the New Year begins, investors across the region will be closely monitoring commodity prices, inflation trends and geopolitical developments to assess the sustainability of recent currency and market gains.
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