Prices of essential commodities to remain high-economist

 PRICES of essential commodities are likely to remain high despite the appreciation of the Kwacha against the US dollar, says financial analyst Maambo Hamaundu.

Mr Hamaundu said the Kwacha becoming bullish was temporary which would only see a reduction in prices of imported goods such as cars.

He said the strength of the local currency would only be appreciated by local traders and consumers if it continued to appreciate against major convertible currencies for a period of four weeks.

Mr Hamaundu explained that there was no guarantee that there would be a reduction in prices in most commodities because during the time the Kwacha lost value most traders incurred huge losses.

He said demand for US dollars was still likely to increase owing to the need for companies to start importing goods ahead of the festive season.

Mr Hamaundu said in a floating system, the rules of supply and demand govern a foreign currency’s price.

He urged the Government to issue prompt and “guarded statements” on the country’s economic outlook when responding to international credit rating agencies and avoid rubbishing them.

The kwacha’s volatility on the foreign exchange market had continued enduring its worst performance last week.

Within one year, the kwacha has lost strength by over K4.50, and depreciated by over 45 per cent, the highest depreciation ever seen.

Mr Hamaundu said Bank of Zambia (BoZ) intervention in the local financial markets would only temporarily halt the local currency’s depreciation because the central bank had a limited supply of foreign exchange.

He warned that demand for the US dollar was expected to grow in the runner-up to Christmas, which would put more pressure on the kwacha’s recovery.

Regardless of the form it takes, money had the same basic goals that encouraged economic activity by increasing the market for various goods and services.

It also enabled consumers store wealth and therefore addressed long-term needs.

them contribute positively to economic development of the country.

She said there was need for countries to fight hard to change the mind-set among its citizenry, especially parents who were in the habit of marrying off their daughters with the hope of improving their economic status at the expense of sending the girl child to school as a long-term measure to end poverty in the family.

“Marrying off children has devastating economic effects not only at household level but the country at large as it throws these children out of school and start oozing after their own families at tender age and the long-term effects are that the child who gets married before attaining the acceptable age will remain in economic problems for the rest of her life.

“This will compound the problem even further especially that even their health is compromised as a result of getting pregnant at an early age. Further, this will result in the girl producing a lot of children whom the family may not manage to take care of in terms of their education and other needs.

‘‘As a result, the whole family remains in the economic bondage because lack of education makes economic independence an impossibility,” Dr. Petroni said.

Categorized | Business

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