Prices To Remain Stagnantly High – Financial Analyst
Prices of essential commodities are likely to stagnantly remain high despite the appreciation of the Kwacha against the US dollar, says financial analyst Maambo Hamaundu.
Mr Hamaundu said the Kwacha appreciating was only temporal which would only see a reduction in prices of imported goods such as cars.
He said the strength of the local currency would only be appreciated by local traders and consumers if it continues to appreciate against major convertible currencies for a period of four weeks. Mr Hamaundu explained that there was no guarantee that there would be a reduction in prices in most commodities because during the time the Kwacha lost value most traders incurred some huge losses.
He said demand for US dollars was still likely to increase owing to the need for companies to start importing goods ahead of the festive season.
Mr Hamaunda said in a floating system, the rules of supply and demand govern a foreign currency’s price.
He further urged the Government to issue prompt and “guarded statements” on the country’s economic outlook when responding to international credit rating agencies.
Within one year, the Kwacha has lost strength by over K4.50, and depreciated by over 45 per cent, the highest Zambia has ever seen.