‘Kwacha likely to trade on weak note’

REDUCED foreign interest in government securities and rising importer demand for the United States (US) dollar are anticipated to affect the Kwacha to trade on a weak note in the coming week, Zanaco Bank says.
On Thursday, Bank of Zambia (BoZ) auctioned K900 million treasury bills was across all tenors and K422.91 million was allocated.
In its daily treasury newsletter, the bank says the local unit was expected to trade in the range of K7.25 and K7.35.
“The Kwacha is expected to trade on the back foot in the coming week due to reduced foreign interest in Government securities and rising importer demand for the greenback,” the bank says.
On Friday, the Kwacha maintained its losing streak, fanned by soaring corporate dollar demand despite having a treasury bills auction.
The local unit opened trading with commercial banks quoting at K7.27 and K7.29, unchanged from Thursday’s close.
BoZ says an upsurge in dollar appetite from the corporate firms witnessed the Kwacha touch a low of K7.32 and K7.34 but, finally closed 0.10 ngwee shy of its low at K7.31 and K7.33 on the bid and offer respectively.
Similarly, Cavmont Bank in its market update says a steady decline in copper prices coupled with a mismatch in the demand and supply of dollar in recent times have seenthe Kwacha fail to break below the K7.00  against dollar barrier.
The bank says the Kwacha came under further pressure against the dollar following its continued strength against most major currencies with the local unit being no exception on Friday.
The local unit opened trading at K7.27 and K7.29 but, it later depreciated by K0.035 to witness it trade at K7.31 and K7.33.
Finance Bank Zambia also says the Kwacha opened trading at K7.27 and K7.29 but, fell quickly against a strong dollar on Friday.
In its daily market update, the bank says high dollar demand from corporate entities on a day when exporters were absent from the market caused the local unit to depreciate to K7.31 and K7.33.

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