LUSAKA (Reuters) – Zambia’s kwacha fell by more than 4 percent against the dollar to a new record low on Monday as the price of copper, the southern African nation’s main export, slipped below $5,000 per tonne to a six-year low.
The currency of Africa’s second-largest copper producer also took a beating from firm U.S. jobs data which signalled a likelihood of an interest rate hike in the United States.
The kwacha was down 3.97 pct to 13.6200 by 0915 GMT, have fallen as much as 4.4 percent in volatile trade.
“Copper accounts for more about 70 percent of Zambia’s foreign exchange earnings and falling prices have telling effects on the kwacha,” one commercial bank trader said.
London copper lost ground on Monday and was sliding towards six-year lows after China trade data underlined struggling growth in the world’s top metals user.
“The dollar continues to put pressure on emerging market currencies,” analysts at the Zambian unit of South Africa’s First National Bank said in a note.
Last month, Finance Minister Alexander Chikwanda said he planned to nearly halve the budget deficit in 2016, but added that the economy would face continued external challenges including weak commodity prices.
(Reporting by Chris Mfula; Editing by James Macharia)
Source : Reuters