Currencies
Zambia Kwacha Turns World Beater With Help From Central Bank
- Rate hike and increased reserve ratio for banks boost currency
- Kwacha rally could continue to 22 per dollar level: FNB Zambia
Zambian kwacha 50 banknotes
Photographer: Waldo Swiegers/BloombergThis article is for subscribers only.
Zambia’s currency is in its longest winning streak in nearly a year, supported by an unexpectedly large interest-rate hike and a decree that local banks hold back more funds in reserve.
The kwacha has climbed almost every day since the Bank of Zambia increased the minimum reserve ratio for lenders on Feb. 5, constricting the flow of funds. Its rally gained further impetus after the benchmark rate increase on Feb. 14.