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Kwacha ends on good note

WITH year-end approaching, liquidity in the market is likely to remain high as Government and corporates continue to release the Kwacha for wages and other month-end obligations as the local unit breached the K6.30 barrier, financial market players observe.
To this effect, the Kwacha is also anticipated to maintain its strong ground.
According to Zanaco Bank analysis of the local money markets, the volume of inter-bank funds traded increased to K282 million from K235 million, while the weighted average overnight interbank lending rate remained unchanged at 12 percent on Thursday.
This is contained in its treasury newsletter issued on Friday that there was a significant reduction in market liquidity to K1,342.98 million from K1,712.48 million recorded the previous day.
On the local currency market, the Kwacha rallied against the United States (US) dollar on Thursday as sustained dollar selling charged the local unit to its strongest since late November on the back of corporates continued sell of the greenback in day trade on Thursday which pushed the local currency clear past the psychological K6.30 barrier.
“From an open of K6.285/6.305, the local unit surged to a high of K6.220/6.240 before eventually, closing at K6.350/6.370 for bid and offer respectively. It was up by over three ngwee on the day with demand for the Kwacha still emanating from corporate wage demands,” the bank notes.
The Kwacha is expected to hold its ground against the dollar and should trade within a K6.22 to K6.32 range in the near term.
Similarly, Cavmont Bank says the Kwacha maintained its impressive run against the world’s reserve currency; trading below the K6.30 handle against the dollar during Thursday’s trading session.
The local currency touched intra-day highs of K6.23 / K6.25, helped by increased dollar inflows and dovish sentiments from the US Federal Reserve which suggested that interim interest rates would remain low.
The currency pair closed at K6.24 and K6.26 for bid and offer respectively, not far off from intra-day high figures.