By Zambian Eye
Zambian President, Michael Sata, has attributed the fall of the Zambian Kwacha to market forces, reports Zambia Eye’s Thom Shonga.
This is according to a statement released on the President’s Facebook page today March 3, 2014.
The president says that the exchange rate is fundamentally affected by the supply and demand of foreign exchange in the market.
“A net demand for foreign exchange, all else constant, results in depreciation while a net supply of foreign exchange contributes to a currency appreciation,” reads the President’s statement.
President Sata says that the recent in the exchange rate is due to a combination of domestic and international market developments.
The President explains that on the international front the US Dollar has gained strength against other currencies following the US Federal Reserve Bank’s decision to reduce the amount of liquidity it injects into the economy.
On the domestic front, the President attributes the depreciation of the Kwacha to Zambia’s economic activity that has seen the demand of capital goods which has increased the demand of foreign exchange.
In recent weeks the Kwacha has depreciated against the US Dollar by 4.3 per cent to its lowest point in almost ten years. Today’s rate is K5.82 to US$1.
Meanwhile, President Michael Sata has assured the nation that his government is closely monitoring developments in the foreign exchange market and has instituted necessary monetary policy that has also seen the inflation rate drop to 6.5 per cent.
Todays Foreign Exchange Rates:
Currency Buying Selling
US Dollar 5.8198 5.8298
GB Pound 9.7384 9.7569
Euro 8.0128 8.0277
Rand 0.5367 0.5427
Note: Rates above are a single unit for each currency converted to the Kwacha
Average Overnight Interbank Interest Rates
03 March 2014 10.3800
Source: Bank of Zambia
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