Kwacha hits K10 mark

Zanaco building.

AFTER holding on below the K10-mark for a while, the Kwacha further depreciated to trade at K10.08/K10.13 against the United States (US) dollar, Zanaco has said.
On Tuesday, the Kwacha pulled back some of its previous day’s losses to trade higher against the dollar.
In its daily treasury newsletter, Zanaco notes that the markets opened with the local unit trading unchanged from its previous day’s close of K10.13/ K10.18. “The afternoon session saw the Kwacha gain supported by market sellers that dominated the market on the day…The local currency hit a high of K10.08/K10.13 where it traded for most of the day until closure – up five ngwee on a closing basis,” the bank says.
On the outlook, the Kwacha is most likely to trade firm on the back of sales of the US currency by companies seeking to stockpile on the local currency to meet tax payments this week.
The Kwacha is expected to keep within a narrow range in the near term floating between K10.05 and K10.10.
In the local money market segment, interest rates are expected to stay with the 16 percent range given the high levels of liquidity.
“The levels of liquidity seen in the market experienced a sharp fall to K2, 548.85 million from K3026.39 million, after settlement of the Treasury Bills auction.
“Consequently, the volume of funds traded on the interbank market went up to K183.4 million from K138.7 million, seen from the previous days’ close,” the bank says.
The weighted overnight lending rate marginally dropped to 16.08 percent from 16.12 percent.
On the commodity market, copper rose on Tuesday aided by a weaker dollar and on further signs of recovery in China following solid inflation figures, while zinc hit a three-week peak on persistent supply shortages.
Three-month copper on the London Metal Exchange traded up 1.3 percent in official midday rings at US$5,661 per tonne.
Prices last Wednesday rose by 2.6 percent to their highest in over a fortnight before profit taking set in.

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