Business

US dollar demand hurt major currencies

KALONDE NYATI, Lusaka
THE Kwacha is expected to post losses against the United States dollar on the back of increased greenback demand by corporates as the currency of one of Africa’s large economy Nigeria, also weakened against the US currency at the start of the week.
According to the Zanaco Bank daily treasury issued yesterday, the Kwacha is likely to experience downward pressure in the short term owing to month-end dollar from corporates.
“Trading range is expected to be between K11.25 and K11.45 in the near term…with dollar month-end demand from corporates expected to be strong, the Kwacha is likely to experience downward pressure,” the bank says.
The bank says the Kwacha, which marginally slipped against the US dollar on Wednesday, weighed down by stronger than expected greenback demand in thin trading, is anticipated to remain under pressure.
In other regional currencies, the Nigerian naira weakened to a record 345 to the dollar on the parallel market on Monday, increasing pressure on the government to devalue the official exchange rate to narrow the gap and spare the country from huge bills for imported goods.
According to Reuters, the local currency eased 1.47 percent from Friday’s close of 340 to the dollar, while the official rate remained at 197.50 to the dollar at the close of trading on Monday.
Last month, Nigeria’s central bank halted dollar sales to non-bank foreign exchange operators and allowed commercial banks to accept dollar deposits, in a failed effort to shore up dwindling foreign reserves.
Nigeria earns around 90 percent of its foreign exchange earnings from crude oil exports, but mismanagement of its refineries means it must also import expensive refined fuel, eating deep into its reserves.
Similarly, the Kenyan shilling marginally depreciated against the dollar on Thursday to trade at 101.804 from 101.794.
The South African rand also depreciated to 15.4824 from 15.4678, according to fxexchangerate .com

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