Kwacha surges to second best currency in Africa

By BUUMBA CHIMBULU

THE Zambian Kwacha has soared roughly 19 percent this year, making it the second-best-performing African currency against the United States (US) dollar, fuelled by rising investor confidence and progress in debt restructuring.
According to Bloomberg, the Kwacha’s year-to-date gains reflect stronger inflows, favourable copper prices, tighter monetary policy, and strategic foreign exchange interventions.
Access Bank in its market commentary also notes that the country’s fiscal outlook is improving as debt restructuring nears completion.
“Rising global copper demand, fuelled by electrification and a projected 30 percent supply shortfall by 2035, positions Zambia favourably.
“With plans to quadruple copper production to three million tonnes by 2031, the Kwacha’s long-term trajectory remains promising, though short-term volatility may persist,” according to the commentary.
The Kwacha’s strength underscores the country’s growing economic resilience, while analysts caution that short-term fluctuations may continue amid global currency volatility.
Elsewhere in Africa, the South African rand remains range-bound around 17.64 against the US dollar, with limited momentum ahead of key economic data.
The US dollar’s subdued performance reflects market limbo, largely unaffected by President Trump’s doubled tariffs on Indian imports or his controversial move to oust Federal Reserve Governor Lisa Cook.
However, Trump’s ongoing pressure on Federal Reserve independence undermines US dollar appeal, with fears of forced dovish policies weighing on the currency.
Signs of a US economic slowdown, including a weakening labour market and declining US dollar liquidity, further dim prospects, as does reduced foreign holdings of US Treasuries.
For the ZAR, this supports a stable outlook, with the USD-ZAR likely confined between support at 17.4850 and resistance at 17.