The Zambian currency - the kwacha - continued its strong gains, trading near its highest levels in more than two years, supported by government directives aimed at reducing the use of foreign currencies in local transactions, which prompted traders to get rid of the dollar on a large scale.
The Kwacha recorded an increase of 0.9% against the dollar during today’s trading, before reducing its gains later and settling at an increase of about 0.4%, continuing the upward path that it began since last year, according to data reported by Bloomberg. The currency also strengthened its gains by more than 2% during the current week alone.
This strong performance comes in the wake of a government financial policy that encourages reliance on the local currency in daily transactions, which led to a noticeable decline in dollar transactions within the local market, and contributed to supporting the value of the kwacha.
At the same time, the Zambian economy benefits from improved global copper prices, the main source of export earnings, which has boosted foreign exchange inflows and provided additional support to the national currency.
The government's efforts to restructure debts and improve public financial conditions also contributed to enhancing investor confidence and supporting economic stability, which reflected positively on the performance of the currency and financial markets in the country.
