Zambian Kwacha under pressure as dollar supply tightens

The Zambian Kwacha came under renewed pressure against the U.S. dollar on Wednesday, as persistent greenback shortages and weakening copper prices continued to weigh on the local currency.

At the start of trading, the Kwacha was quoted at K27.800/27.850 per dollar on the interbank market, indicating a stable opening.

However, sustained demand for the dollar pushed the currency lower during the session, closing at K27.900/27.950.

An update from Absa Bank Zambia attributed the performance to continued supply-demand imbalances in the foreign exchange market.

Compounding the pressure on the Kwacha is a sharp fall in copper prices, following an aggressive global selloff spurred by escalating U.S. trade tensions under President Donald Trump.

Copper, which accounts for over 70 percent of Zambia’s foreign exchange earnings, has seen prices on the London Metal Exchange plummet—at one point marking the steepest three-day drop since 2008.

A recent surge in copper prices triggered by tariff threats gave way to steep losses as the U.S. abruptly ended a wave of import purchases, creating fears of an oversupplied market.

With manufacturers deterred by new tariffs, demand has also started to soften.

An analysis by Access Bank Group warned that declining copper prices and output could significantly reduce dollar inflows into Zambia, further straining the Kwacha.

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