Kwacha under siege as copper price drops


AFTER successive days of appreciating against the greenback, the local unit’s gains were halted on Friday.

The Zanaco Daily Newsletter said, with dollar supply relatively subdued on the day, the Kwacha lost 2 Ngwee.
The report states that from an opening level of K5.260/5.280, the Kwacha slipped to touch a trough of K5.29/ K5.31 on the bid and offer, respectively, on the back of good dollar demand.
The statement says it recouped some of the losses to trade at K5.26/5.28 for much of the day before closing the day at K5.28/K5.30.
With current demand expected to persist,  the Kwacha should trade with a bearish tone.
The expected trading range was between K5.23 and K5.33,  the interbank money market liquidity experienced a further upswing, closing the week at K2 061.4 million from the prior levels of K1762.9 million.
The volume of interbank funds traded on the day conspicuously decreased to K27.0 million from K91.7 million while the weighted average overnight lending rate was posted at 10.0 per cent from 10.2 per cent.
On account of the high liquidity levels and the modest demand for interbank funds, the overnight lending rate was expected to remain flat with some likelihood of dropping below the 10.0 per cent mark in the near term.
And Reuters reports that copper edged lower on Friday after hitting its highest in almost a month as investors, following the United States Federal Reserve’s decision to stick to its stimulus programme, shifted focus back to fragile fundamentals.
Benchmark copper on the London Metal Exchange (LME) hit a session high of  $7,368 a tonne, its highest since August 27, before slipping to trade at $7,280 at the close, down from a close of $7,335 on Thursday.