By Kamuti Muyambela
The Kwacha has today breached the K19 psychological barrier, and is now selling at K19 for USD1.
This is the highest the local currency has depreciated since President Hakainde Hichilema was voted into office in August 2021.
Things are certainly not going to plan, as the depreciation goes against the President’s claim then that the country would witness a rapid appreciation of the currency on account of the investor confidence his election would instil into the economy.
The President at one point daringly went as far as claiming that the local currency would experience a rapid appreciation whereby once he is sworn in at 10 hours, by 15 hours the very day, the country would see a rapid appreciation of huge proportions.
It’s yet to be seen how the local currency would hold in the medium to long term, but in the short term, further depreciations risk price stability in the market, including eroding the savings of those who have saved in local currency.
This may further induce panic buying of the dollar and other major convertible currencies which would lead to a further weakening of the currency, and subsequently feeding into more inflationary pressures.
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