Weak Dollar Exposes Fragile Strength of Zambian Kwacha — Analyst Warns
As the U.S. dollar steadily weakens and nears the K20.00 mark, economic analyst Kelvin Chisanga has cautioned that the Zambian Kwacha’s apparent gains may not be as robust as they seem.
He says the local currency’s current strength is largely reflective of global trends rather than Zambia’s own economic fundamentals.
“The Kwacha’s rise is not necessarily a sign of intrinsic resilience,” said Mr. Chisanga. “It’s more a consequence of the dollar’s continued decline and certain localised interventions and policy adjustments.”
He explained that while the current environment presents opportunities—especially for traders, those involved in remittances, and cross-border arbitrage players—it should not be mistaken for long-term economic strength.
“This could be an opportune moment to act for those who benefit from currency volatility,” he said. “But we must exercise cautious optimism, as the gains are not rooted in solid fundamentals and are vulnerable to sudden reversals.”
Mr. Chisanga added that importers, debt-servicing institutions, and entities with dollar-based obligations could face major challenges as the weakening dollar creates uncertainty in pricing models, financial forecasts, and risk management strategies.
“The Kwacha’s position is fragile. In such a shifting environment, strategic agility is key. We need to recognize how quickly the tide can turn,” he warned.
