Depreciation of the Kwacha is because of high debt – Hamaundu
Financial Market Analyst Maambo Hamaundu has attributed the depreciation of the Kwacha to the country’s high debt levels which he says has reduced investor confidence in the economy.
Mr. Hamaundu says the country’s debt levels have now reached a level of about 70 per cent of the GDP which takes away confidence from the economy.
Mr. Hamaundu explains that factors leading to the depreciation of the Kwacha would be because of under subscription to the treasury bills by foreigners and those that had subscribed earlier may not be reinvesting, which takes away the FOREX from the market.
Mr. Hamaundu says the depreciation of the Kwacha is more centred on confidence from those with the monies while government is also putting pressure on the rate of exchange by getting a lot of FOREX to service the high debt levels.
He explains that despite copper being the source of traditional exports and having stable prices on the international market, the country is not exporting much of the non-traditional exports which continue to put pressure on Kwacha.