By Jane Chanda
Economic analyst Yusuf Dodia says commodity prices may reduce in two to three weeks’ time if the Kwacha’s strength is sustained.
In an interview with Daily Revelation, Dodia who is also Private Sector Development (PSD) chairman explained that the sustainability of the Kwacha’s performance would largely depend on whether the gains were driven by export earnings through the Export Proceeds Tracking Framework.
“If the Kwacha continues to perform in this manner, prices of commodities are likely to reduce in the next two to three weeks,” Dodia said.
He noted that the appreciation of the Kwacha could lead to a reduction in commodity prices within the specified timeframe, provided the trend was sustained.
Dodia further cautioned stakeholders to closely monitor the performance of the Kwacha before making predictions about reductions in commodity prices, as the local currency had continued to gain strength against major convertible currencies.
He said the impact on the economy may be minimal if the appreciation was only short-term, noting that the business trade cycle typically spanned about 90 days.
Dodia further emphasised the importance of sustained performance for the Kwacha’s gains to have a meaningful impact on the economy.
In recent weeks, the Zambian Kwacha has experienced a notable surge in value, appreciating from K26.45 to approximately K24.30 against major convertible currencies.
