Zambian currency appreciates after president's national address

Zambia's currency, the kwacha, appreciated significantly on Friday following a state of nation address by President Edgar Lungu.

In his address broadcast live nationwide, Lungu announced austerity measures aimed at shoring up the faltering economy and the sagging kwacha which had depreciated more than half this year.

The kwacha appreciated by more than 5 percent on Friday, its biggest gain in two months. It was traded between 9.96 kwachas and 10.16 kwachas per U.S. dollar, according to the website of the Bank of Zambia.

Some analysts attributed the appreciation of the kwacha to Lungu's assurance to both international and local markets that he is taking measures to fix the economy, but others said the appreciation was due to the move by mining firms and other companies to buy the local currency to meet month-end obligations such as paying salaries and taxes.

According to analysts, the mining firms have offloaded a lot of dollars to buy the local currency to pay benefits of thousands of workers who have lost their jobs.

BancABC, a pan-African financial services provider headquartered in Botswana, said that corporate sellers in the market were busy exchanging the U.S. dollar for the kwacha to meet month-end obligations.

The bank, however, said uncertainties over the mining industry due to falling copper prices will continue to dampen the outlook of the local currency in the long term.

Mambo Hamaundu, a financial analyst, said that the appreciation of the local currency was due to interventions by the central bank as well as positive sentiments about the Zambian leader. Endi