KALONDE NYATI, Lusaka
THE money market has witnessed a reduction in interbank borrowing on the back of increased liquidity, First National Bank (FNB) has said.
This entails that borrowing of funds among banks for a specified term reduced.
In its market update, FNB says that heightened liquidity levels have seen a significant reduction in the interbank borrowing while the weighted average interbank rate has been around 16.50 percent.
“Despite the treasury bill settlements on Monday, market liquidity remains fairly high with over K1.2 billion in circulation. The heightened liquidity levels have seen a significant reduction in interbank borrowing while the weighted average interbank rate has been sticky around 16.50 percent,” the bank says.
On the foreign market, FNB says although the Kwacha/dollar rate did not move much from its opening level, there is still a fair amount of demand intra-day.
The bank in its market update says the market opened at K10.00 on the offer and closed around the same level.
“Momentum remains to the upside, given the lack of dollar supply on the local market. With very little event risk, K9.90 and K10.00 is expected to hold in the short-term,” the bank says.
Meanwhile, Zanaco says the Kwacha was yesterday was expected to be capped between K9.90 and K10.00 with factors of demand and supply expected to be the main drivers of the currency pair’s next move in the short term.
Zanaco says in its daily treasury that the local unit that was relatively subdued in the previous session was yesterday projected to trade between K9.90 and K10.00.
“The market opened at K9.85 and K9.90 stronger than the previous day’s close of K9.88 and K9.93 on the interbank.