[miningmx.com] — ZAMBIA’s kwacha gained 2.4% on Monday, a rare climber among emerging and frontier market currencies, as it recovered from a sharp loss on Friday triggered by the upset election victory of opposition leader Michael Sata.
During early morning trade the currency of Africa’s biggest copper producer was at 5,050, only a shade weaker than Thursday’s 5,005 close.
On Friday, the unit lost nearly 4% amid concerns about the direction of economic and investment policy under Sata, who has been a fierce critic of Chinese mining companies operating in Africa’s biggest copper producer.
“It was just overdone last week. Everybody went long dollars because of the uncertainty about the rhetoric going into the elctions,” one Lusaka-based trader said. “But he has assured investors he will work with them.”
The kwacha has traded in a 4,600 to 4,840 band for much of the last 12 months, although in the run-up to the September 20 election retreated towards 5,000 – a level that has tended to trigger central bank support.
The trader said the central bank was absent from the market on Monday.
Sata toned down his anti-Chinese rhetoric during the six-week election campaign and was at pains to reassure foreign investors in a short speech delivered after his inauguration on Friday.
He was due to meet Beijing’s ambassador on Monday, his first working day as President, in another sign that he is prepared to work with the Chinese firms that have poured more than $2bn into developing the copper mining sector.
