Ex-lawmaker, Banda, queries economic fundamentals driving rise in value of country’s currency, Kwacha

Former Kasenengwa Member of Parliament, Sensio Banda, has challenged the Central Bank to explain to the nation the plausible factors which are currently influencing the money market, particularly the exchange rate.

Banda said the local currency’s appreciation against United States Dollar recently is not sustainable because it is not in sync with prevailing economic fundamental trends.

The former Kasenengwa Constituency Lawmaker told Zambia Monitor that it is difficult to appreciate the gains made by the local currency.

“We do not appreciate the factors at play; later on to ascertain Kwacha appreciation sustainability, as well as predictability of how other economic fundamentals factors shall respond,” he said.

Banda said there was need for government to find a long term solution on the fiscal side to effect fiscal policies which will stimulate economic growth and support the monetary policies been pursued by the Bank of Zambia (BOZ)….”Without which, the upwards and downwards swing of the Kwacha shall continue be an adversive occurrence to our national economy. This phenomenon is not good for the business sector, cost of living and the economy at large,” he said.

Banda noted that two weeks ago, the Central Bank through the Monitary Policy tried to affect the size of money supply, through open-market operations by issuing bonds but that this did not yield the desired outcomes.

“Therefore, it’s hard to say whether the above intervention could have been one of the contributing factors towards the appreciation of the kwacha on the 20th of June 2023. It is not good for citizen to be guessing as to what factors are effecting the apparent changes in the exchange rate,” he said.

Banda said it was important to note that meaningful monetary policy measures being put in place by the Bank of Zambia must begin to achieve both inflation and economic growth objectives…”Without which, the upwards and downwards swing of the Kwacha shall continue be an adversive occurrence to our national economy. This phenomenon is not good for the business sector, cost of living and the economy at large,” he said.

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