The Kwacha has been subjected to unwarranted speculation by some financial institutions and businesses that have been investing money into money instead of production former Minister of Finance Kalumba Katele has said.
He has called on the Ministry of Finance and the Bank of Zambia to curtail speculative behaviour intended to hurt the Kwacha and ultimately the economy.
The Kwacha has suffered one of the worst depreciation episodes in decades because of the speculative behaviour of some of the financial institutions, the former Finance minister has said.
He said this is because some business houses were involved in the unacceptable practice of trading in the currency rather than investing in production.
He said with the stabilisation of the exchange rate, it had become imperative for the Ministry of Finance and the Bank of Zambia (BoZ) to take bold and known measures to ring in what he described as negative tendencies by some banks and businesses engaged in speculative behaviour to weaken the confidence of the Kwacha.
Dr Kalumba said he had a lot of confidence in Finance Minister Alexander Chikwanda and the Central Bank Governor Denny Kalyalya to curtail speculative behaviour by some financial institutions and businesses which were hurting the exchange rate. “If Zambia became a failed state because the opposition political parties kept their best ideas in their private pockets for use as manifestos or campaign tools next year, my advice is that the political scenario will not favour them. The political scenario will not be good for both the governing party and the opposition political parties and that is why they must bury their differences and work together to protect the economy.
He warned that if Government was not going to take strong measures to protect the Kwacha which had shown stability in the last weeks, there was a danger that the economy could get into a scenario of depression.
Dr Kalumba explained that currency speculation often led to hoarding of the United States dollar which banks and businesses would then sell at a higher rate thereby causing the depreciation of the Kwacha.