ZANACO has attributed the slight appreciation of the kwacha to the statement made by the Chinese Central Bank Governor Yi Gang that China will finally join Zambia’s creditor committee.
According to ZANACO’s Indicative Forex Rates on 22 April 2022, the kwacha is buying at K17.03 and selling at K17.36.
The Bank’s Head of Economic Research Dr. Patrick Chileshe said China’s commitment is likely to accelerate the pace of restructuring Zambia’s debt because previously investors were concerned with china’s participation in the process.
Speaking in an exclusive interview with the Zambian Business Times-ZBT, Chileshe said now that China is firmly on board, everyone is indicating that it is just a matter of when and not if as it is almost a done deal.
Chileshe explained that the International Monetary Fund (IMF)’s indication that it has finally agreed to move ahead, together with the World Bank on Zambia’s US$1.4 billion bailout package has also contributed to the appreciation of the kwacha adding that IMF was also happy to hear that China is going to participate in the debt restructuring process.
He added that china been the largest lender to Zambia them participating in the process adds more credibility to the restructuring process for Zambia’s debt
“The rates are reacting to positive sentiments that have come out of Washington, positive news came out of Washington and that is what the market is reacting to. All the orders of foreign currencies appear that the kwacha is likely to gain significantly, we are seeing a low of around 15 so what we might see is more and more people might start panic selling and that must push the kwacha to more appreciation”, he said.
“We are seeing the kwacha crossing into well below the K16 mark into K15; it is already indicating that direction at the moment. If you look on the interbank market, the kwacha is trading at around K16.80 and we expect those rates to translate into market rates very quickly. We should see it next week open even much lower in terms of trading on the interbank market”, Chileshe said.
