Kwacha Depreciation Raises Concerns as Dollar Shortage Hits Zambia
The Zambian Kwacha has encountered losses due to a shortage of US Dollar supply in the local market, prompting concerns among economists and experts about the country’s economic stability. Outstripping US Dollar supply has pushed the Kwacha into a downward spiral, raising worries about the potential impact on essential goods and services.
According to Mr. Kelvin Chisanga, an economic expert, the issue of Kwacha’s losses appears to be a persistent challenge, demanding urgent and effective solutions to mitigate its adverse effects.
Mr. Chisanga emphasizes the need for strategic interventions to prevent high costs on essential goods and services, which could result from interest rate hikes in the future.
He points out that fluctuations in the foreign exchange rate exacerbate inflationary pressures, making it difficult for businesses and investors to operate efficiently. Zambia is currently grappling with various challenges across multiple sectors, including water, agriculture, electricity, and fuel.
However, amidst these challenges, Mr. Chisanga sees an opportunity for Zambia to revamp its economic structure and leverage potential opportunities in the regional export market.
He emphasizes the importance of adopting extraordinary measures to create a strong buffer against economic turbulence.
“The case of Kwacha, with a focus on exchange rates, underscores the need for proactive measures to address this scenario,” says Mr. Chisanga. Failure to act swiftly could lead to a challenging economic environment, with significant storms anticipated throughout the year.
