IMF Bailout Approval Helps Zambian Kwacha Take the Russian Ruble"s Position as World"s Best Performing Currency
After the International Money Fund revealed it had approved a bailout package for Zambia, the Southern African country’s currency, the kwacha, rallied by 3.1%. Following this gain, the kwacha took the Russian ruble’s position as the world’s best-performing currency in 2022. Zambia Still ‘Has a Long Way to Go’
The Zambian kwacha currency, which currently trades at K15.40 for every dollar, became the world’s best-performing fiat currency when it was announced that the International Monetary Fund (IMF) had approved the $1.3 billion bailout for the country. With a year-to-date gain of over 18.25%, the kwacha has taken the Russian ruble’s position as the world’s best-performing currency.
According to a Bloomberg report, news of the International Monetary Fund (IMF)’s approval of the $1.3 billion financial bailout to the African country saw the kwacha rally by 3.1% in a single day. Zambian officials including President Hakainde Hichilema — who is popularly known as “HH” — have touted the currency’s gains and the approval of the bailout as proof that the new government’s policies are working.
In remarks following the bailout announcement, Hichilema reportedly said: I didn’t go to bed until the IMF board passed the Zambia issue. Minutes later, the MD [Kristalina Georgieva] herself sent me a message: HH, it’s done.
Joseph Kalimbwe, a Zambian government spokesperson, said in a tweet that while the kwacha had overtaken the ruble, the “country still has a long way to go.”
Low Demand and Increased Supply of Dollars Led to Kwacha Appreciation
Meanwhile, economist Patrick Chileshe is quoted in a Pindula news report suggesting that the kwacha’s resurgence may be tied to the low demand for dollars coupled with the Zambian central bank’s intervention.
“We have seen the Kwacha gain strength, and that was driven by increased foreign exchange supply to the market by the Bank of Zambia which was consistent in the market, whereas the demand for US dollars has been low and that led to the appreciation of the Zambian kwacha,” Chileshe is quoted saying.
In addition to helping the kwacha become the world’s best-performing currency, the Zambian government’s policies are thought to have have contributed to the drop in the inflation rate from over 24% in August 2021 to 9.8% by June 2022.
Register your email here to get a weekly update on African news sent to your inbox:
Tags in this story Bank of Zambia, Foreign exchange, International Monetary Fund, Kristalina Georgieva, Patrick Chileshe, President Hakainde Hichilema, russian ruble, Zambian Kwacha
What are your thoughts on this story? Let us know what you think in the comments section below. Terence Zimwara
Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route. Bitfinex CTO Paolo Ardoino States Salvadoran Bitcoin Bonds to Be Further Delayed EMERGING MARKETS | 2 days ago Bitcoin Beach to Receive More Than $203 Million in Infrastructure Investments in El Salvador EMERGING MARKETS | 4 days ago
Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articlePoloniex, Bittrex Want Kyle Roche’s Law Firm Removed From Class-Action Against the Exchanges Next articleFIFA to Launch NFT Platform for Soccer Fans Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItRipple CEO: SEC Lawsuit Over XRP "Has Gone Exceedingly Well"
The CEO of Ripple Labs says that the lawsuit brought by the U.S. Securities and Exchange Commission (SEC) against him and his company over XRP "has gone exceedingly well." He stressed: "This case is important, not just for Ripple, it’s ... read more.Today"s Top Ethereum and Bitcoin Mining Devices Continue to Rake in Profits NFT Sales Volume Saw a Small Uptick This Week — Moonbirds, Mutant Apes Take Top Sales UAE Airliner Emirates to Launch NFTs and Experiences in the Metaverse Economist Predicts the Fed"s Response to Inflation Will Push Crypto Higher