TRYNESS TEMBO, Lusaka
MONTH-END tax obligations by corporates and settlement of government securities are expected to further help the Kwacha strengthen against the United States (US) dollar in the short-term, as copper price on the international market
yesterday rose sharply aided by renewed appetite for industrials commodities.
Zanaco says the local unit’s trading range is expected to remain between K9.25 and K9.350 in the days ahead.
On Friday, the Kwacha was relatively unchanged against the dollar in measured trading, which is the system that regulates the buying or selling of goods and services where the value is determined by measurement but posted overall gains for the week.
“The Kwacha could strengthen in the short term as supply from both the corporates and the interbank market remains strong precipitated by demand for the local unit to meet both month end obligations and settlement of government securities,” the bank says in its daily treasury newsletter.
On the day, commercial banks quoted the local unit at K9.32 and K9.37 to the dollar, two ngwee weaker than Thursday’s close of K9.30 and K9.35.
Zanaco says the Kwacha subsequently, traded at its opening levels for most of the day as the market appeared to be in equilibrium and it eventually, closed at K9.30 and K9.35 on the bid and offer respectively.
Similarly, Cavmont in its market report also says the Kwacha closed the month at K9.30 and K9.35, representing an appreciation of three percent compared to the previous month’s closing levels of K9.58 and K9.63.
Meanwhile, copper, which is Zambia’s major export earner yesterday rose sharply as investors returned from a three-day weekend in most of Asia with a renewed appetite for industrial commodities.
Reuters reports that the gains in both London Metal Exchange (LME) and Shanghai Futures Exchange copper were aided by advances in Asian stocks on easing concerns over North Korea.
Three-month copper on the LME gained one percent to US$5,769 a tonne, building on gains from the last session on Friday.