By 
Zambia’s kwacha has been named one of the three worst-performing currencies globally, according to a Bloomberg report as quoted by Business Insider.
Joining the kwacha on this list are the Angolan kwanza and the Nigerian naira.
The report cited poor currency management, economic imbalances, and overdependence on commodities like oil as key reasons for the weak performance of African currencies.
Oil-exporting nations such as Nigeria and Angola remain vulnerable to fluctuations in global oil prices, further weakening their currencies.
In June, the Zambian kwacha recorded its lowest performance, trading at 26.4698 per US dollar.
The report attributed this decline to depleted foreign reserves, driven by a lack of fiscal sustainability and ongoing droughts that have worsened food imports and external financing needs.
The International Monetary Fund (IMF) approved an increase in financial support for Zambia, raising the amount from US$1.3 billion to US$1.7 billion to help the nation cope with the effects of the drought.
However, despite these efforts, Zambia continues to struggle with external debt repayments, leaving the kwacha underperforming.
Read more :kwacha-strengthens-as-increased-supply-meets-foreign-exchange-demand
The Angolan kwanza, which has depreciated by 12 percent this year, hit its worst performance in 25 years, trading at 950 per dollar.
The decline was linked to Angola’s overreliance on oil, which makes up over 60 percent of its budget.
Falling global oil prices have eroded Angola’s hard-currency reserves.
In Nigeria, despite recent reforms aimed at liberalizing the naira, the currency remains weak, currently trading at 1,580 per dollar.
The slow pace of economic reforms, combined with erratic monetary policies and crude price drops, has kept the naira in undervalued territory.
The report further noted that half of the 10 worst-performing currencies globally are from Africa, with many struggling due to inflation, dollar shortages and volatile commodity prices.
WARNING! All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express permission from ZAMBIA MONITOR.
Comments