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Copper Price Drop to Affect Kwacha

zambia-copper-chinaAn economist says the current drop in copper prices below US$7,000 per tonne is likely to have an effect on the availability of foreign exchange on the market thereby adding more pressure on the Kwacha.

Professor Oliver Saasaa has also described the development as bad news for the country, stating that the economic stability in the major importing countries has affected the copper prices.

He also observed that copper prices are likely to come further down responding to the law of supply and demand.

Professor Saasa has tribute the fall in copper prices to reduced demand in major importing countries such as China.

He adds that slow global economic growth could be another reason for the decrease in the copper prices.
He states that the development is likely to have an effect on the government treasury.

Professor Saasa hopes that the copper prices will rebound soon to $8,000 per tonne.

Source: Qfm

2 Comments

  1. The Other Professor

    Prof Saasa should say why China’s demand has reduced to be more informative. Just saying China has reduced demand is not enough. Do they have high inventories now? And what is the impact on the demand given slow growth in America, and lack of growth in Europe.

    There is also something going on about the Kwacha, it does not respond anyhow to copper prices and he may be wrong on this one. I dont think the Kwacha will be affected that much. Over the past five years the Kwacha has not responded to copper prices. I doubt this will be affected moreso because mining companies do not bring their proceeds into Zambia.

    We must not base our analysis on the simple rule of demand and supply, that is for first year undergraduate students.

  2. Zambia: Copper Price Drop to Affect Kwacha | Kwatu

    [...] An economist says the current drop in copper prices below US$7,000 per tonne is likely to have an effect on the availability of foreign exchange on the market thereby adding more pressure on the Kwacha. Click here for the Full Story [...]

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