By KALONDE NYATI
THE Kwacha on Tuesday made marginal gains against the United States (US) dollar, aided by an interbank sell-off on the back of subdued demand on the day, but financial analysts anticipate the local unit to depreciate in the shortterm as demand for the greenback continues to characterise the market.
Zanaco Bank says in its daily treasury for Wednesday that the local unit, which on Tuesday recorded an intra-day high of K6.13 and K6.15, is expected to be under pressure on the back of increased interbank demand coupled with the existing high liquidity levels in the money markets.
â€œThe Kwacha is expected to be bearish [unstable] in the shortterm on the back of increased interbank demand coupled with the existing high liquidity levels in the money marketsâ€¦Trading range is expected to remain between 6.1 and 6.2,â€ the bank says.
The bank, however, says the soon-to-be auctioned treasury bills are expected to cushion the volatility in the local unit.
On the international front, the British pound continues to depreciate.
According to Reuters News, the pound fell towards recent lows on Tuesday, keeping the cost of hedging against sharp swings over the next week at its highest in four years, as Scotlandâ€™s vote on independence approaches.
The pound was down 0.3 percentage point at US$1.6175, having fallen to a 10-month low of US$1.6052 last week.
Similarly, South Africaâ€™s rand weakened against the dollar on Tuesday as investors braced for easing domestic inflation numbers, an expected unchanged rates decision and more hawkish comments from the US Federal Reserve later this week.
By KALONDE NYATI