THE Kwacha is expected to remain on the defensive in the near-term as United States (US) dollar demand is anticipated to hold, while supply may be weak, financial market players have observed.
Zanaco Bank says the Kwacha yesterday was anticipated to trade in the range of K9.80 and K9.95.
“We expect the local unit to remain on the defensive in the near-term as dollar demand is expected to hold, while supply is likely to be weak,” the bank says in its daily treasury newsletter.
On Monday, the Kwacha slipped lower against the dollar undermined by thin dollar supply, breaking a three day strong run.
Zanaco says the local currency opened trading at K9.79 and K9.81, but fell in early trade as the market bought the dollar, but closed at K9.83 and K9.85.
It says supply was thin with many exporters sitting with sufficient Kwacha liquidity to meet their pay as you earn obligations which fell due on Monday.
Similarly, Cavmont Bank in its market report says the Kwacha is expected to remain range bound in the interim.
The bank, however, says the US Federal Reserve interest rate decision this week on Thursday is likely to affect the performance of the Kwacha together with other emerging market currencies.
It says the Kwacha closed trading at K9.83 and K9.85, which was K0.035 weaker than Friday’s closing levels.
Meanwhile, Finance Bank Zambia says at the start of the week, the Kwacha traded flat against the dollar, while interbank flows were tame, and only a few pockets of demand was witnessed on the corporate front.
On the regional front, South Africa’s rand and the Botswanan pula depreciated on Tuesday to trade at 13.545 from 13.486 on Monday, and 10.420 from 10.415, respectively.
Others currencies are the Kenyan shilling which also depreciated to 105.509 from 105.45, while the Nigerian naira remained unchanged at 199.25.
Just rebase again