Central bank: Zambia's depreciating currency due to speculative behaviors

Zambia's central bank has attributed the continued depreciation of the local currency, the Kwacha, to speculative behaviors by market players, a statement obtained by Xinhua said on Friday.
The Zambian currency has depreciated significantly since the start of the year and efforts by the central bank to quell its free fall have so far failed.
The currency retreated to a record low against major convertible currencies this week, weakening by as much as 2.3 percent, its biggest slide in two months to trade at 7.00 Zambian Kwacha to a U.S. dollar.
The Bank of Zambia said the free fall of the value of Kwacha was, among other things, due to speculative behaviors by market players.
"The Bank of Zambia therefore wishes to advise the public to desist from taking any speculative positions on the Kwacha, as this may result in heavy financial losses on their part when the Kwacha reverts to an equilibrium path that is consistent with the economic fundamentals," the Central Bank said.
The central bank has since projected an appreciation of the local currency since copper prices have now started improving, adding that it was now in a position to absorb any external shocks.
Copper prices on the London Metal Exchange reached 6,952 dollars per ton on May 28. According to the central bank, it was good news for Zambia where copper earnings accounts for about 70 percent of foreign exchange inflows.
The central bank has since assured that the prospects for the country's economy remain positive and strong with growth expected to exceed seven percent in 2014.