By KALONDE NYATI
THE Kwacha opened the week on firmer footing against the United States (US) dollar after a rally on Friday from the KR5.40 (5,400) highs to an average low of KR5.30 (K5,300) on the back of corporation tax payments that were due on April 14.
According to Citibank, the local currency was, however, expected to be a relatively quiet session yesterday as most players are short of the Kwacha after paying taxes.
“In the week ahead, we expect the Kwacha to track international trends of a weak global economic recovery evidenced by China’s weak growth for the first quarter and copper prices down to US$7,330 per tonne,” Citibank says in its daily market commentary.
Standard Chartered Bank says the local unit was yesterday, expected to see importer’s interest at attractive levels.
“Today [yesterday] we expect to see importers’ interest at these attractive levels and would look for a small bounce but market will continue to favour a sell on the rallies towards the K5.400 key resistance,” the bank’s market update states.
Similarly, Zanaco Bank says the local unit is expected to trade at about KR5.30 (KR5,300).
“In the near-term KR5.30 is expected to act as support with a breach of this psychological barrier leaving room for further appreciation,” Zanaco bank says in its daily treasury newsletter.
The bank also said the Kwacha closed last week on a good note after it surged against the US dollar on Friday, posting its largest intra-day appreciation since February to reach an almost two-month high.
The local unit opened trading at par with Thursdays close KR5.35 (K 5,350) and KR5.37 (K5,370) but shot up in the later part of the morning.
The Barclays Bank Zambia market update also says the Kwacha touched its highest point in almost three months as it breached the KR5.30 (K5,300) psychological barrier for the first time since late January.
The local unit’s bullish posture was bolstered by dollar supply as key market stakeholders sold dollars to meet local currency tax obligations.
“The opening bell saw market traders quoting the greenback at KR5.35 (K5,350) and KR5.37 (K5,370) on the bid and offer respectively.
By mid-morning however, the Kwacha made impressive strides as it quickly brushed aside the preceding month-to-date high set the day before and climbed to K5.275 and K5.295 to the dollar, a level not seen since the end of January when it traded at KR5.29 (K5,290),” it says.
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