Business

Civil servants’ salaries to boost Kwacha

TRYNESS TEMBO, Lusaka
THE upcoming civil servants salaries are expected to ease the current tight liquidity conditions standing at K357.75 million, as the Kwacha is anticipated to continue on a strong note against the United States (US) dollar supported by constant supply from

both corporate and interbank market.
Zanaco says liquidity, which is the term used to describe how easy it is to convert assets to cash, marginally increased by about K56,360.
In its daily treasury newsletter, the bank says the market witnessed slight increase from K301.39 million on Wednesday to K357.75 million on Thursday.
“The volume of funds traded by commercial banks reduced to K195 million from the previous day’s levels of K222 million. The cost of trading overnight funds marginally went up, closing at 13.69 percent from 13.58 percent.
“The current tight market liquidity conditions will ease in the near term on the back of monthly inflows for civil service salaries,” the bank says.
On the local currency market, the Kwacha is expected to be strong and trade in the range of K9.35 and K9.40 in the short term.
Zanaco says the local unit extended its strong hold against the dollar on Thursday helped by sustained market supply.
“In the short term, the Kwacha is expected to continue trading high against the dollar on the back of sustained supply from both the corporates and the interbank market,” the statement reads.
On Thursday, the local unit opened trading at K9.35 and K9.40 and was decidedly stronger through the day due to substantial dollar selling by corporates and the interbank market raised hopes that the local currency will strengthen further.
UBA in its treasury newsletter also says the Kwacha opened Friday’s session trading at K9.30 and K9.35 stronger than the previous close.
The bank says the local unit sustained its strong drive against the greenback and is expected to trade in the range of K9.30 and K9.60.
Similarly, First National Bank says the Kwacha is expected to have an upward movement due to the upcoming month-end which may witness an increase in dollar conversions by corporates to meet their tax obligation.
Meanwhile, copper price on the international market was up by one percent on Friday at US$5,679 a tonne, matching the previous session’s gain.

 


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