Copper surge powers Kwacha, boosts Zambia’s economic Outlook

By Kelvin Chisanga

Zambia is currently responding positively to elevated global copper prices, with clear spillovers observed on the domestic economy and the exchange rate.

Stronger copper prices have boosted export earnings and foreign exchange inflows, reinforcing the supply of hard currency on the local market and further supporting the Zambian Kwacha.

The improved external position has enhanced market confidence, helping the Kwacha to trade on a firmer ground despite global currency volatility conditions.

Higher export receipts have also eased pressure on the balance of payments and contributed to better liquidity conditions in the foreign exchange market.

From a macroeconomic perspective, favourable copper prices are strengthening fiscal revenues through the mining sector, improving the government’s capacity to meet expenditure obligations and external commitments.

A firmer Kwacha is additionally helping to moderate imported inflation, offering some relief to domestic price pressures.

However, Zambia’s response remains closely tied to production stability and policy consistency.

While prices are supportive, sustained benefits depend on uninterrupted mining output, timely investment in new capacity and a stable policy environment that encourages long-term capital inflows.

Overall, elevated copper prices continue to act as a key anchor for Zambia’s macroeconomic stability.

In the medium term, maintaining production growth, strengthening value addition, and advancing economic diversification will be critical to ensuring that gains from copper translate into durable currency and economic resilience.

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