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Treasury bills auction to cushion Kwacha

THE upcoming auction of Treasury bills next week is expected to cushion the Kwacha not to breach the K6.3 mark against the United States dollar,  Finance Bank is optimistic.
The bank’s treasury market report says the local unit’s performance will be largely dependent on the forces of demand and supply.
The Kwacha is expected to trade below the K6.2 level with likelihood of appreciation.
“Should sentiment swing positive, Kwacha is likely to see a correction and see the unit climb below the K6.2 level. However what is more likely is the currency losing further  ground  but  with  the  central   bank  active  and  a  Treasury bill  auction  next  week…It should resist the K6.3 in the short term,” the report says.
Last week, the Kwacha dropped to a near three-month low depreciating by about 1.5 percent on Friday.
Similarly, Cavmont Bank says the Kwacha has continued to be stable against the dollar trading within the range of K6.27 and K6.29 on Tuesday remaining unchanged from the previous day’s close.
The bank says the local unit has continued to trade within a tight range against the dollar. This is despite other major currencies trading on the back foot against the greenback.
“The Kwacha has shown resilience and by close of the trading on Tuesday, the Kwacha was at K6.27 and K6.29 remaining much unchanged from the previous day’s close,” the statement reads.
On the local money market, commercial banks’ aggregate current account balance increased by K397.31 million to over K2.4 million on Tuesday from K2.1 million the previous day while the cost for interbank borrowing and lending increased by a percentage point to 12.5 percent.

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