By Ellen Hambuba
The Zambian Kwacha has recorded a strong performance this week, posting notable gains against the United States dollar.
Interbank market rates show the Kwacha buying at K19.92 and selling at K20.00 per US dollar.
Analysts say the currency’s appreciation against major convertible currencies is being driven by increased dollar sales to meet tax obligations and central bank measures to curb the use of foreign currency in local transactions.
Economist KELVIN CHISANGA says Zambia is also benefiting from elevated global copper prices, with positive effects evident in the domestic economy and the exchange rate.
As of early January, copper prices on the London Metal Exchange –LME- have surged to record levels, topping about $13,000 per metric tonne amid strong demand and concerns over supply disruptions.
Mr. CHISANGA told ZNBC News that stronger copper prices have boosted export earnings and foreign currency inflows, increasing the supply of hard currency on the local market and supporting the Kwacha.
He added that a firmer Kwacha is helping to ease imported inflation, providing some relief from domestic price pressures.
