BY BUUMBA CHIMBULULOW international reserves have contributed to the depreciation of the Kwacha as the Bank of Zambia (BoZ) is unable to offload dollars on an open market to ease the pressure caused by COVID-19.This is according to the Economics Association of Zambia (EAZ) Financial Analyst and Strategist, Mutisunge Zulu.Mr Zulu explained that the BoZ did not have the luxury to offload dollars on the open market due to inadequate international reserves.Zambia currently has about US$1.4 billion of reserves which is equivalent to six weeks of import cover while the Kwacha as of last week was trading between K18.50/ K18.55 against the dollar.“The Central Bank does not have the luxury to sell dollars on the open market because it are also looking for dollars. So ideally if we had adequate reserves, then the Central bank would have been selling a good chunk of dollars to ease pressure,” Mr Zulu said in an interview.Mr Zulu emphasised […]
‘Low foreign reserves dipping Kwacha’
