Kwacha likely to remain resilient, says President Lungu
Written by MillenniumEditor2 on July 26, 2021
President Edgar Lungu says the Kwacha is likely to remain resilient against the United States dollar as government continues to implement measures in the Economic Recovery Programme-ERP.
After some months of trading above K22 against the United States dollar, the Kwacha has seen huge gains, trading around k20 in some bureau today.
President Lungu has attributed the gains in the Kwacha to an improvement in foreign exchange flows from the mining sector owing to high copper prices and a ramp in production.
He says this has led to a significant expansion in the trade balance estimated at US$1.9 billion during the period January to May 2021, compared to US$576.8 million over the same period in 2020.
The Head of State says there has also been a significant flow from non-resident investors seeking to buy government securities, evidenced by the oversubscription at 116 percent in the bond issuance held on Friday, which has improved liquidity in the foreign exchange market.
President Lungu also says there has been a confidence boost in the market following the announcement by the International Monetary Fund-IMF to allocate Special Drawing Rights to its members in August.
President Lungu said this through a post on his Facebook page this morning.
But financial analyst Mambo Hamaundu has observed that the gains from the continued appreciation of the kwacha may not be sustainable.