Ms. Kateka Calls for Bank of Zambia to Respond to the Escalating Exchange Rate
The economic crisis in Zambia deepens as the national currency, the Kwacha, continues its rapid descent, reaching an alarming exchange rate of K27.0680 against the US Dollar today, according to ABSA.
Concerns are escalating among citizens and political figures, with the President of the New Heritage Party, Chishala Kateka, expressing grave apprehension over the situation.
Ms. Kateka urged the Bank of Zambia to provide clear and transparent communication regarding the factors contributing to the freefall of the Kwacha and to outline a comprehensive roadmap to address the crisis.
“Zambians are facing an unprecedented economic challenge, and it is crucial that the Central Bank discloses the underlying dynamics that have led to this alarming downward slide,” Ms. Kateka stated. “Understanding the root cause is essential to implementing effective solutions and preventing further damage to our economy.”
Ms. Kateka raised several critical questions directed at the Bank of Zambia:
Identification of Parameters: What parameters or dynamics have changed to trigger this rapid decline in the Kwacha’s value? Understanding the fundamental shifts in economic factors is crucial to formulating targeted interventions.
Reasons for Misbehavior: Why has the foreign exchange rate misbehaved to such an extent? What new conditions exist that have caused this unprecedented freefall? Clarity on these issues is vital for informed public discourse and decision-making.
Contradicting Bloomberg Projections: Ms. Kateka highlighted Bloomberg’s projection of a 72% likelihood of the exchange rate reaching K35.6/$ by the end of 2024 and K40.2985/$ by the end of 2026. She urged the Bank of Zambia to provide information contradicting these projections to empower citizens in countering negative perceptions in the global financial markets.
Measures to Address the Crisis: What measures have been put in place, or are being considered, to arrest this situation? Transparency in the steps taken by the government and the central bank is seen as essential to restoring confidence among the citizens and potential investors.
Ms. Kateka emphasized the importance of open communication, especially with the Access to Information Bill yet to be operationalized. “It is good practice to be communicative and not leave citizens guessing with regard to what is going on,” she remarked.
