TRYNESS TEMBO, Lusaka
IN THE weeks ahead, the Kwacha is anticipated to breach the K9.00 barrier if exporters come into the market to offload their United States (US) dollar to buy the local unit to meet their tax obligations, First National Bank (FNB) has projected.
FNB says after flirting in the mid K9.10 range, the dollar demand eased, pulling the rate back below K9.10 level on Friday.
“With supply set to continue improving, greenback/Kwacha looks poised for moves lower. The unit is likely to break K9.00 in the week ahead if exporters come to the market to convert their greenback.
“Moves can be exaggerated in the absence of efficient price discovery,” the bank says in its daily treasury newsletter.
Similarly, Zanaco, in its daily treasury newsletter says the local unit is expected to remain steady against the dollar in the trading session ahead and should keep within a K9.05 and K9.15.
The bank notes trading activity in the Kwacha-dollar currency pair was relatively sluggish on Friday characterised by low interest from the corporates and interbank traders with the local currency posting minor gains against the greenback.
“The local currency opened trading at K9.10 and K9.15, unmoved from Thursday’s close. It kept within a tight band through the day anchored by subdued trading activity on the day. The Kwacha eventually closed five ngwee stronger at K9.05 and K9.10, also it’s highest on the day,” the newsletter reads.
United Bank for Africa also says in the near term, the local unit is expected to trade in the range K9.00 and K9.15.
On Tuesday, the local currency market opened trading at K9.04 and K9.09 on the interbank stronger than Friday’s close and posted marginal gains against the greenback after trading sluggish in the previous week.
Meanwhile, copper price on the London Metal Exchange (LME) yesterday posted more gains to trade at K6,428.50 a tonne.
LME copper was 0.2 percentage point higher at US$6,428.50 a tonne, coming close to retesting Monday’s 14-month peak of US$6,447.50.