KALONDE NYATI, Lusaka
THE Kwacha, which has throughout this month remained generally stable against the United States dollar, is this week expected to remain range-bound although month-end obligations could push its appreciation.
First National Bank says as the month comes to a close, dollar flows could increase, causing the Kwacha, which has this month generally maintained the K9.20 and K9.30 bands, to appreciate.
“The Kwacha has been trading steadily; we expect this to continue into this next week. Demand has matched supply, but this equilibrium could break in the event of a mismatch. As we approach month-end, dollar flows could increase, causing downward pressure [ZMW appreciation].
Assuming no unexpected events ahead, the month should close near current levels,” FNB says in its daily market update.
Similarly, Zanaco Bank says the Kwacha, which on Friday held steady against the US dollar with demand for the greenback appearing to taper off, easing pressure on the local unit, is expected to maintain the K9.20 and K9.30 levels.
“The local unit is expected to continue trading in a narrow range as the market appears to be in a matched position. Trading range is expected to be between K9.20 and K9.30,” Zanaco bank says in its daily treasury.
The local money market experienced a drop in liquidity levels from a high of K181.01 billion to K793.16 million.
Similarly, the volume of funds traded dropped to K106 million from K177 million seen on the previous day.
The overnight interbank lending rate stood at 12.28 percent from 12.33 percent.
The central bank has continued its presence on open market operations, which is the buying and selling of government securities to expand or contract the amount of money in the banking system, in both the morning and afternoon sessions to borrow funds.
“This signals that interest rates may stay above 12 percent in the near term,” the bank says.