BOZ Warns Of Further Kwacha Depreciation

The Bank of Zambia’s acting assistant director of communication, Bersnart Mwanza, has warned that the Kwacha has fallen a further 8.0% against the US dollar due to low exports by the mining sector and the impact of Covid-19 on global trade.

The Kwacha now stands at K19.81 per USD - down from K18.34 last month.

In a statement to the media Ms Mwanza said the lower exchange rate was due to decreased investment from the mining sector, as well as foreign financial firms, who usually purchase government securities.

She said this was in line with a general decrease in Zambia’s exports - including minerals - as a result of the Covid-19 pandemic and its impact on global trade. 

The news follows accusations that the PF government is printing money to fund its own election spending, triggering further depreciation.

Last month, former finance minister Dr Situmbeko Musokotwane said “In particular, we are aware that there is pressure to print money for continued lavish electioneering spending after emptying the Treasury. Already evidence is clear that the printing has started”. 

Meanwhile the BOZ has been forced to provide foreign exchange liquidity for Zambian buyers who have been unable to purchase forex due to a decreased supply.