Kwacha rally cools, stability takes centre stage
Zambian Social Economist Kelvin Chisanga
By Kelvin Chisanga
The Zambian Kwacha recorded a strong substantial effect and with broad-based performance ratios seen in January, reflecting improving macroeconomic fundamentals, enhanced policy credibility and better foreign exchange market behaviour.
Firm export inflows from the mining sector, supported by resilient copper prices, improved FX availability and eased currency pressures, reinforcing overall macroeconomic stability.
From a technical standpoint, the kwacha broke out of the late-2025 depreciation trend and entered a stronger, more stable trading range.
Reduced volatility, tighter bid-ask spreads and momentum exhaustion signals point to solid consolidation rather than reversal in February, with downside risks increasingly contained.
At the macro level, exchange rate stability supports disinflation, strengthens monetary policy transmission, and improves fiscal planning.
At the microeconomic level, it lowers input cost uncertainty for firms, stabilises pricing decisions, and improves business confidence.
For commodities, particularly copper, currency stability enhances revenue predictability and investment planning.
Strategically, the focus should remain on policy consistency, liquidity discipline and export diversification strategies to sustain stability and reinforce long-term economic resilience.
About The Author
