TRYNESS MBALE, Lusaka
THE positive sentiments on the country’s mining tax regime are expected to assist the kwacha to continue on its strong footing against the United States (US) dollar, financial market players observe.
Recently, President Edgar Lungu ordered the Minister of Mines, Energy and Water Development and Minister of Finance to effect changes to the 2015 mineral royalty tax by April 8 as the system poses a challenge to mining houses due to the slump in copper prices on the global market.
Finance Bank, in its daily market update, says the directive, coupled with monthend tax obligation by corporates, is anticipated to contribute to the strengthening of the kwacha, which has been volatile in the past weeks.
“While most other African currencies could weaken on dollar demand by importers, we expect to see the kwacha maintain its strength against dollar on positive sentiment on mining royalties and conversion for tax obligations,” the statement reads.
Meanwhile, the interbank foreign exchange rates obtained on the Bank of Zambia website, however, showed that the local unit traded slightly weaker than the previous session.
The kwacha was selling and buying at K7.56 and K7.58 yesterday, from K7.55 and K7.58 the previous day.
A survey conducted in some bureaux in Lusaka and Ndola revealed that the local unit mixed changes in the kwacha/dollar trade on Tuesday.
At Unifinance Bureau Ndola, the local unit yesterday remained unchanged at K7.45 and K7.62, buying and selling, respectively, from the previous day’s close session while its Lusaka outlet also showed an appreciation in the buying rate, but depreciation in selling rate.
The kwacha traded at K7.65 and K7.62, from K7.50 and K7.67.
However, the local unit was trading at K7.45 and K7.64 at Lusaka’s Bimm Bureau.