Agri-business Business

Kwacha breaks K10 mark

THE Kwacha has continued its progressive drive against the United States (US) dollar, breaching the K10-level on the interbank due to tight liquidity in the money market, financial market players say.
Cavmont Bank says the local unit closed trading at K9.925 and K9.975, 1.25 percent stronger when compared to the market opening levels.
The local unit opened trading at K10.05 and K10.10 on Wednesday, but was later seen being quoted at K9.95 and K10.00 by noon.
“The Kwacha maintained its positive momentum against the dollar on Wednesday, as it broke below the K10.00 level owing to tight liquidity in the money markets coupled with a further increase in supply from sellers,” the bank says in its market report.
Similarly, Zanaco says reduced greenback demand on the market, coupled with increased demand for the Kwacha from corporates trying to meet their month-end tax obligation, is expected to help the local unit continue trading on a strong footing against the greenback.
In its daily treasury newsletter, the bank says the local unit is expected to trade in the range of K9.50 and K9.90 in the short-term.
“The Kwacha is still expected to trade on a strong footing as market players trim dollar demand and keep local currency to meet month-end local currency obligations,” the bank says in its daily treasury newsletter.
On Wednesday, the Kwacha extended its strong run against the dollar as interbank and corporate players pared their greenback positions to cope with a local currency liquidity squeeze.
Commercial banks quoted the local unit at K9.95 and K10.00 on Wednesday, 50 ngwee stronger than the previous day’s close of K10.00 and K10.05.
Zanaco says much of the dollar supply was driven by corporates on the day which saw the Kwacha close 25 ngwee strong at K9.85 and K9.90 in the late session.

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