By BUUMBA CHIMBULUTHE payment of taxes, over and above mineral royalties by mining companies in dollars has sucked foreign exchange supply from the open market causing imbalances on the supply side.This aspect, coupled with demand surges, has weighed the exchange rate.This is according to the Kwacha Arbitrageur Magazine Chief Macro Business Strategist, Mutisunge Zulu. In June this year, the Zambia Revenue Authority wrote to all mines to remit all taxes in dollars and directly to the Central Bank to shore up foreign exchange reserves.But Mr Zulu said the move had sucked foreign exchange supply from the open market causing imbalances on the supply side, which coupled with demand surges, has weighed the exchange rate.He explained that the Kwacha had this year to date suffered a 40 percent valuation loss as structural imbalances in the foreign exchange market had caused currency sell-off pressure.He said this in the latest Kwacha Arbitrageur Report on “Budget Analysis and Debt […]
Mines’ tax payments ‘sucking’ forex, says expert
