(3 minutes read)
· Former ZNBC Director General and leading Economist Chibamba Kanyama has disclosed that what is helping the Kwacha to appreciate is the fact that Zambia is currently defaulting her US dollar denominated external debt
· He said it is currently difficult to state or know whether the current appreciation of the Kwacha will last, because was due to wrong reasons
· Importantly, copper revenue of the Southern African country has gone up recently.
Former ZNBC Director General and leading Economist Chibamba Kanyama has disclosed that what is helping the Kwacha to appreciate is the fact that Zambia is currently defaulting on her US dollar denominated external debt. He said it is currently difficult to state or know whether the current appreciation of the Kwacha will last, because was due to wrong reasons. Importantly, copper revenue of the Southern African country has gone up recently.
Kanyama explained that the fund holders and creditors were currently charging penalties on the interest and not on the principle. He revealed that currently the penalties for defaulting are standing at over US$1 billion. Kanyama said this is why it is difficult to know whether this kwacha position will last or not because the money being used to strengthen and increase supply in the market is not ours but money owed to the creditors.
The Kwacha has posted over five percent gains in the last two weeks against major convertible currencies such as the US dollar. It has even breached the 1US$ per K18 range with Kasumbalesa (a forex hotspot) bureau de change rates trading at US$1 to K18.1 to K18.4 range. Bank rates in the capital Lusaka are still trading in the K19 per dollar range.
