KALONDE NYATI, Lusaka
THE Kwacha is expected to remain range bound by close of this week although monthend tax obligations will increase demand, thus offer support for the local unit, a
financial market analyst says.
Yesterday, First National Bank (FNB) said as the monthend approaches, the local unit is expected to trade at K8.90 against the United States dollar, with possibilities of being in the range of K8.80.
“The outlook for the remainder of the week is for limited moves. Resistance is seen at K8.90, with firm support at K8.80. As monthend approaches, it is K8.90 that is more likely to be breached as monthly Kwacha obligations build up,” the bank says in its daily market update.
Similarly, United Bank for Africa (UBA) says the local currency, which opened yesterday’s trading session at K8.83 and K8.88 on the bid and offer, weaker than Wednesday’s close, is expected to remain firm against the greenback.
“The local unit traded sluggish posting marginal losses from last week’s but is expected to remain firm against the greenback. In the near term, we expect the local unit to trade in the range K8.80 and K8.90 on the bid and offer, respectively,” the bank says.
However, Zanaco Bank projects the local unit to trade in a tight band in the days to come with a weak bias on the back of lower supply for dollars as monthend flows dry out.
Zanaco says in its daily treasury that trading range is expected to be between K8.80 and K8.90 in the short-term.
On Wednesday, the Kwacha declined marginally against the dollar, mainly due to a slight pick-up in dollar demand by corporate and interbank players with the expectation that it could continue trading steady in the short term.
The local currency trailed demand of the greenback on the day, losing two ngwee from an open of K8.81 and K8.86 to close at K8.83 and K8.88 on the bid and offer, respectively.