Zambian Kwacha Rides Copper Boom to Multi-Year Highs
Brief Market Overview
The Zambian kwacha continued its remarkable ascent, gaining over 3% against the U.S. dollar on Thursday its strongest daily advance in months.
The currency has now appreciated more than 21% year-to-date, making it Africa’s best-performing currency in 2025.
This performance underscores renewed investor confidence in Zambia’s economy, driven primarily by strong fundamentals in the copper sector.
Global copper prices have surged slightly above $10,800 per tonne, fueled by global supply constraints and Zambia’s accelerating production outlook.
Key Drivers
Copper Momentum: Global supply disruptions notably from floods in the DRC and a fatal mine collapse in Chile have constricted supply, tightening markets just as Zambia scales up output.
Record Output Forecast: Zambia is on track to surpass 1 million tonnes of copper production in 2025, a milestone not achieved in nearly a century.
Investment Surge: Mining giants such as Barrick Gold and First Quantum Minerals are collectively injecting around $10 billion into Zambia’s mining sector to expand production capacity and enhance long-term resilience.
Expert Reaction
The kwacha’s performance is a clear demonstration and deep reflection of Zambia’s improving external balance, higher export receipts and growing global confidence in its economic reforms
The combination of strong commodity performance, debt restructuring progress and macroeconomic stability has enhanced Zambia’s attractiveness to portfolio and direct investors alike.
Economic Implications
Currency Strength: While a stronger kwacha helps curb imported inflation, it could slightly tighten margins for exporters if appreciation persists.
Fiscal Benefits: Increased copper revenues will support foreign reserve accumulation and improve budgetary space for infrastructure and social spending.
Monetary Policy Outlook: The Bank of Zambia is expected to maintain a cautious stance, balancing exchange rate stability with inflation management.
Focus and Outlook
It is highly anticipated that this continued kwacha strength present strong signal in the near term if copper prices remain elevated and if fiscal discipline keep holding. However, sustaining this trajectory will depend on structural diversification beyond the mining sector and stable policy execution.
