Chikwanda explains weakening kwacha

———Finance Minister Alexander Chikwanda says
the major reason for the weakening of the Kwacha is the increasing
demand for foreign exchange on the local market against slow inflows
of the dollar.

Mr. Chikwanda said that the country was not earning enough foreign
exchange due to the lower copper prices on the international market..

He pointed out that net monthly foreign exchange in 2014 exceeded
US$100m but it has since fallen to US$ 85m.

Mr. Chikwanda said this when he delivered his Ministerial Statement
on the Kwacha exchange rate to Parliament today.

He said the hard currency earnings will improve as the fiscal year
progresses especially from the mining sector as copper prices continue
to go upwards as has been the case in the last week.

Mr. Chikwanda stated that government will continue to monitor the
situation and will through the Central Bank take up the necessary
measures to prevent excesses in exchange rate movements.

He further said government will complement the efforts of the bank by
continuing the consolidation fiscal process that will help in
moderating demand conditions for foreign exchange.

“Government will always be mindful of the possible injurious effects
of a weakened national currency, a robust and diversified agricultural
sector can generate export earnings to furnish the country with enough
and reliable hard currency to permit assured kwacha stability,’ he
said.

He has since called on nation not to be unduly alarmed  by the
movements in the exchange rates as it has the effect of inducing
speculations which can sway the exchange rate away from the
fundamentals.