Government and financial authorities have provided explanations for the recent performance of the Kwacha, pointing to a combination of foreign exchange inflows, export earnings, and coordinated macroeconomic management measures.

Officials from the Bank of Zambia stated that the exchange rate reflects prevailing market conditions, particularly demand and supply dynamics within the foreign exchange market. They noted that increased availability of foreign currency has supported the local unit in recent weeks.

According to the central bank, one of the key contributors has been higher export receipts, especially from the mining sector. Zambia’s mineral exports continue to account for a significant share of foreign exchange inflows, with earnings entering the domestic market through formal banking channels.

Authorities also referenced improved compliance with foreign exchange regulations, which they said has enhanced the flow of export proceeds into the local market. The Bank of Zambia has previously emphasised the importance of ensuring that export earnings are repatriated in line with statutory requirements.

In addition to export receipts, officials cited external financing inflows and budgetary support as contributing factors. These inflows, they said, have increased foreign currency liquidity and reduced pressure on the Kwacha.

Government representatives stated that fiscal discipline has also played a role. They said expenditure controls and coordination between fiscal and monetary authorities have helped stabilise market expectations. Officials indicated that reduced uncertainty in public finance management has supported confidence among market participants.

The Bank of Zambia noted that monetary policy measures aimed at managing liquidity have contributed to moderating inflationary pressures. By maintaining a tight policy stance where necessary, the central bank said it has worked to contain excess liquidity that could otherwise fuel exchange rate volatility.

Economists have observed that currency movements are influenced by both domestic and global factors. Global commodity prices, interest rate developments in major economies, and investor sentiment all affect exchange rates, including the Kwacha. Authorities cautioned that external shocks can alter conditions rapidly.

Officials also highlighted seasonal factors, noting that periods of strong export activity often coincide with improved exchange rate performance. They stated that such trends are common in commodity-dependent economies.

While acknowledging recent gains, authorities cautioned against interpreting short-term movements as permanent shifts. They stated that sustained currency stability requires consistent policy implementation, continued export performance, and prudent fiscal management.

The central bank reiterated that it does not target a fixed exchange rate, but instead allows the Kwacha to be determined by market forces within a managed framework. Intervention, when undertaken, is aimed at smoothing excessive volatility rather than setting a specific rate.

Authorities further stated that the public should view currency movements in the context of broader economic fundamentals rather than daily fluctuations. They said the focus remains on maintaining price stability, supporting economic activity, and safeguarding financial system stability.

As Zambia continues to implement economic reforms and engage with international partners, officials said maintaining policy consistency remains essential to preserving confidence in the currency and the wider economy.