Home Zambia News President-elect HH’s win boosts Zambia’s Eurobonds, kwacha surge

President-elect HH’s win boosts Zambia’s Eurobonds, kwacha surge

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kwacha

A Financial Analyst has attributed the recent surge in the kwacha and Zambia’s 1 billion dollar Eurobonds to investor confidence following the declaration of Hakainde Hichilema as President-elect in the just ended 2021 general polls.

Mr. Mambo Hamaundu says market forces are confident that the incoming administration will improve the economy.

Speaking in an interview with ZANIS, Mr Hamaundu predicted that the kwacha will continue to appreciate leading up to the inauguration of the President-elect.

He said pronouncements that will be made during the inauguration ceremony will be key in determining whether the dollar to kwacha rate will continue improving.

He however said there must be a fundamental shift to create kwacha stability in the long term.

“The kwacha dollar rate is determined by demand and supply so it is a question of what shift are we going to have that will alter the demand and supply to ensure a balance that will lead to a stable exchange,” Mr Hamaundu said.

And Mr Hamaundu explained that the surge in Zambia’s Eurobonds means the price of the country’s bonds on the market where they are traded in London have increased.

He said Zambia still has an obligation to pay the 1 billion dollar Eurobond due in 2024.

He however said having a strong currency will make it easy for Zambia to pay back the 1 billion dollar Eurobond due in 2024.

“Those bonds are in dollars so the better the rate of exchange, the better it will be when the time to pay arises,” he said.

Zambia’s $1 billion of Eurobonds due in 2024 jumped 11 percent to 74.14 cents on the dollar in London yesterday, the biggest gain since March 2020.

The local currency also surged the most since November 2015 to 19.1375 per dollar.