Business

Kwacha anticipated to nose-dive, SA rand picks

KALONDE NYATI, Lusaka
THE Kwacha is expected to trade on a downward trend as corporates demand mount pressure on the United States (US) dollar, financial market analysts say.
Meanwhile, the South African rand yesterday witnessed a marginal rise against the greenback as hopes for further interest rates hike buoy market sentiments.
According to Zanaco Bank, the local unit is likely to experience downward pressure in the near-term trading in the range of K11.35 and K11.45 on the inter-bank market owing to dollar month-end demand from corporates.
At the close of last week, the Kwacha was flat against the US dollar with the local market witnessing little activity on the day, a trend that is expected to continue in the near- term.
“Trading on the interbank market was relatively quiet while corporate activity was insufficient to move the market significantly. At 08:30 hours, commercial banks posted the local unit at K11.35 and K11.37 per dollar, unchanged from the previous day’s close,” the bank says in its daily treasury.
On the regional front, the rand was little changed against the dollar in early trade on yesterday as hopes for further interest rate hikes buoyed sentiment, although investors were cautious ahead of the budget later in the week.
According to News24, the rand opened the session at R15.4000 against the dollar, not far off its Friday’s close of 15.3850.
The currency last week traded at its strongest levels this year, firming to R15.2460 on Thursday, after rising inflation bolstered expectations that the South African Reserve Bank would hike interest rates further.
News24 says focus this week would be centred on Finance Minister Pravin Gordhan’s three-year budget presentation to Parliament tomorrow.
“Analysts have cautioned that the rand could resume the downward spiral triggered by the clumsy changing of finance ministers in December if the budget fails to convince investors that prudent fiscal policy remains intact,” the publication says.
In other economies, the Kenyan shilling depreciated to 102.03 against the dollar from 101.435 recorded on Friday while the Nigerian naira remained unchanged trading at 199.25 recorded on Friday, according to fxexchangerate.com.

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