Browsing: President Hakainde Hichilema

A currency crisis occurs when the value of a country’s currency falls drastically. www.theexchange.africa

A currency crisis is defined as a quick and abrupt depreciation of a country’s currency. Currency depreciation goes in tandem with turbulent markets and a loss of confidence in the country’s economy. Historically, crises have arisen when market expectations induce significant movements in the value of currencies.

The global economy is now in turmoil. As the world economy enters another era of a currency crisis, the value of the US dollar keeps rising. Over half of all international trade is billed in dollars. A stronger dollar thus hurts consumers globally, particularly in Africa, who rely on dollars to pay for imports.

The US Federal Reserve’s hawkish approach to increasing interest rates more aggressively than central banks in other major countries has contributed to the dollar’s appreciation. The fact that investors generally see the dollar as a “safe haven” asset during times of economic turmoil has added to its resilience.…

A dollar is trading at 16.67 Kwacha and 13.35 Seychelles rupees as at December 31. Both countries were among the three worst performers in 2020.
This has fueled speculation from corporate participants and currency retail traders on when exactly to exit foreign currency risks for dollar hoarders or whether to buy the Kwacha as a safer haven store for value.
President Hichilema’s government is in the process of reworking as much as $17 billion in external public debt. He has submitted an endorsement request to the IMF as his administration advances talks with creditors from US$3 billion in Eurobond holders to US$5.8 billion owed to the Republic of China.…