Economist, Yusuf Dodia, says it is too early to determine the underlying reasons behind the continued appreciation of the Zambian kwacha against major convertible currencies.
The local currency has recently gained strength, now trading around K23 to a dollar, sparking widespread speculation on the cause of its recovery.
Speaking in an interview with RCV News in Lusaka today, Mr. Dodia said a clearer picture should emerge by July, when more economic indicators become available.
“If the appreciation is a result of Bank of Zambia’s intervention, then it is not sustainable,” said Mr. Dodia.
Mr. Dodia explained that if the strengthening is due to foreign currency inflows from mining companies meeting local obligations, the trend may be short-lived due to the inconsistency of such flows.
He However noted that if the kwacha’s performance is driven by regulatory reforms, particularly the Export Proceeds Tracking Framework, the appreciation could be more sustainable, as it would reflect a structured and consistent policy environment.
By Christabel Kamunu
