Kwacha Strengthens Further, Reaching K17.9 to the Dollar

The Zambian kwacha has continued its upward run against the US dollar, reaching K17.9 at the close of business on Tuesday.

Figures published on the Bank of Zambia website showed that, as at 15:30 hours, the kwacha was both buying and selling at K17.9 to the dollar. The rate marks the strongest level the local currency has recorded in years.

The latest gain extends a trend that the central bank has attributed to robust foreign exchange inflows. Bank of Zambia Governor Dr Denny Kalyalya said earlier this month that the kwacha had appreciated by 14.8% against the dollar in the first quarter of 2026, supported by strong inflows from the mining sector and foreign financial institutions. The currency added a further 0.8% in April, bringing the year-to-date appreciation to 14.53% as of 11 May.

Speaking at last month's Monetary Policy Rate briefing, Dr Kalyalya said the mining sector continued to supply the bulk of foreign exchange to the market. Net foreign exchange sales by mining companies rose to 626 million dollars, while tax remittances to the central bank reached 289.7 million dollars. Together, these inflows lifted total foreign exchange liquidity from the mining sector to 759.4 million dollars over the quarter.

Foreign financial institutions contributed a further 542.3 million dollars to the market, up from 335.6 million dollars in the previous quarter. Improved liquidity pushed net supply to 230.2 million dollars, compared with 93.4 million dollars previously, and the central bank acted as a net buyer to moderate volatility and build reserves. Activity on the interbank market also rebounded, with 396.5 million dollars traded against 151.6 million dollars in the preceding period.

Dr Kalyalya noted, however, that escalating conflict in the Middle East had lifted demand for foreign exchange, leaving outstanding demand orders of 33.1 million dollars at the end of March, compared with none at the close of December 2025.