LUSAKA, March 5 (Xinhua) — The head of an association representing the interest of foreign mining firms in Zambia has denied that mining companies were responsible for the current low U.S. dollar supply which has resulted in the local currency depreciating, the Post of Zambia reported on Thursday.
Zambia’s Finance Minister Alexander Chikwanda said the local currency, the Kwacha, had come under pressure from major convertible currencies such as the U.S. dollar due to high demand for foreign currency locally and reduced foreign exchange earnings due to low copper prices.
Copper accounts for about 70 percent of Zambia’s foreign exchange earnings.
But Chamber of Mines of Zambia president Jackson Sikamo said the mining firms were not holding U.S. dollars to starve the local market of foreign currency.
“We don’t hold any U.S. dollars; there is no company which holds dollars and say ‘I will only offload dollars when the exchange rate moves in one direction’; it is not possible for any mining company to do that,” the official was quoted as saying the paper.
Analysts have predicted that the local currency was expected to remain under pressure due to the shortage of the U.S. dollar.
The finance minister said the country’s net monthly foreign exchange earnings have fallen due to lower copper prices from 100 million dollars per month last year to 85 million dollars.