Kwacha Rebased expected to remain flat against the dollar this week
Lusaka, March 27, 2013, ZANIS—Standard Chartered Banks says the Rebased Kwacha closed Tuesday at KR5.410 and KR5.430 for bid and offer against the dollar on Tuesday.
The Bank explains in its daily brief, today, that this was due to the buying interest mainly driven by the Small and Medium Enterprises (SMEs).
The bank says the kwacha is expected to be range bound and trade around KR5.380 (K5,380) and KR5.440 (K5,440) against the greenback.
Meanwhile, the kwacha traded relatively flat against the US Dollar on Tuesday because of improved dollar inflows which curtailed the fall of the local currency experienced in previous weeks.
According to the ZANACO treasury newsletter for Wednesday 27 March 2013, the domestic unit was trading at KR 5.405 (K5,405) and 5.425 (K5,425) at the opening of the market.
This indicates that the local unit has recorded a marginal gain of KR.005 from its previous close of KR5.410 (K5,410) and KR5.430 (K5,430) for bid and offer, respectively.
“Trading was more balanced on the day as dollar supply picked from selling from some offshore and local interbank players. On the other hand demand for the greenback from Corporates in various sectors remained strong putting pressure on the Kwacha, ” the bank said in the newsletter.
According to the newsletter, the kwacha closed the day unchanged from its opening level as a result and is in the near term expected to range within KR5.350 (K5,350) and KR5.450 (K5,450)
On the international money market, the South African rand firmed on Tuesday at 9.2465 after a government bond auction drew strong demand, although gains were limited by nagging concern about the outlook for the euro zone.
This was 0.66 per cent stronger than Monday’s close of 9.3083.
The Sterling eased from near six (6) week highs against the euro and fell against the dollar on Tuesday, after weak retail sales data reminded investors about Britain’s gloomy economic outlook.
Sterling fell 0.1 per cent to $1.5150, well below a one-month high of $1.5280 hit on Monday.
The euro hovered near a four-month low against the dollar on Tuesday as mixed messages from European officials kept fears alive that a decision by Cyprus to tax large bank depositors would set a precedent for other troubled euro-zone economies.
The euro last traded at $1.2858, slightly up for the day, after falling as low as $1.2827, its lowest level since Nov. 22.
The greenback is a term that refers to the US dollar and is derived from the paper currency that was issued by the US during the American Civil War to keep the economy stable and help to pay for the war.