Zambian kwacha hits record low against US dollar

By Rachel Savage and Chris Mfula

JOHANNESBURG/LUSAKA, May 8 (Reuters) – Zambia’s kwacha currency hit a record low against the U.S. dollar on Wednesday, hitting 27.30 to the dollar, amid a shortage of hard currency and a harsh drought that has led to outages of energy in the southern African copper producer.

The kwacha, which tends to slowly weaken before briefly strengthening, has lost almost 5% of its value against the dollar this year and 17% in the last six months, according to LSEG data. Its previous low was 27.23 on February 6.

Zambia, one of the largest copper producers on the African continent, defaulted on its obligations in 2020 during the COVID-19 pandemic. Their debt restructuring efforts have been hit by delays, although they took a step forward in March when the government and a group of bondholders reached an agreement in principle.

A team from the International Monetary Fund (IMF) is currently visiting the country, discussing a third payment of a $1.3 billion rescue loan program approved in 2022.

(Reporting by Rachel Savage and Chris Mfula; Editing by Chizu Nomiyama)