THE Kwacha has continued to appreciate against major convertible currencies because the markets are expecting the Patriotic Front (PF) to continue in government after the August 12 general elections, former Finance Minister Alexander Chikwanda has said.
Mr Chikwanda has dismissed with contempt assertions by United Party for National Development (UPND) leader Hakainde Hichilema who has attributed the appreciation of the Kwacha to himself and his party.
He said the markets and investors are expecting the PF government to continue governing hence has creating confidence of continuity of good policies, resulting in the appreciation of the Kwacha.
Mr Hichilema who has in the past claimed that the Kwacha would continue to depreciate and only gain if his party formed government has made an economically strange claim that the Kwacha has been appreciating because the markets were expecting regime change.
Mr Hichilema has flamboyantly attributed the appreciation of the Kwacha to himself claiming that there would be a change of government in the next 18 days hence the the ability of the Zambian currency to gain strength.
But Mr Chikwanda who is PF Central Committee member has rubbished Mr Hichilema’s wild claims, stating that as a matter of fact, the markets were expecting continuity of the PF in government resulting in the Kwacha becoming the world’s best performing currency.
Mr Chikwanda stated that there were clear economic fundamentals such as the over-subscribing of the Treasury Bills and the high copper prices which are currently at US$9,521 per metric tonne which had made the Kwacha to start appreciating.
He explained that the strong recovery in copper prices to the current level of US$9,521 per metric tonne from as low as US$4,745 last year had contributed to sustained strong export earnings for the country.
“The Kwacha is gaining because the markets are expecting continuity. The markets have confidence that the PF will continue in Government and that is why the Kwacha is on a sustained path of appreciation. It is not about Mr Hakainde Hichilema’s wild claims that the markets are expecting change of government. That claim should be dismissed with the contempt it deserves,” Mr Chikwanda said.
He further attributed the appreciation of the Kwacha to government’s minimized participation in the Treasury bill.
He said the Treasury Bills have so far been over-subscribed by about 116 percent.
He said the Kwacha would continue to be bullish because foreigners coming to Zambia did not have the local currency and were therefore forced to offload the dollar on the market to access the Kwacha.