Kwacha on upward trend

LIQUIDITY levels have increased after recording a drop in the previous sessions as the Kwacha also continues to trade on an upward trend due to significant United States (US) dollar inflows, a financial market analyst says.
Zanaco says the market witnessed a marginal rise in liquidity levels from a close of K2.2 billion to K2.3 billion.
“The volume of funds traded on the interbank market, consequently, dropped to K102.30 million from K131.50 million,” the bank says in in its daily treasury.
However, the weighted overnight interbank lending rate dropped further to 16.08 percent from 16.12 percent.
The bank anticipates that rates are expected to stay below 17 percent given the current levels of liquidity.
On the foreign exchange market the local currency trading is expected to remain the stronger oscillating within a K9.95 and K10.00 range with demand and supply factors being the main drivers of the currency pairs next move.
On Friday, the Kwacha was steady on Friday in quiet trading, but was expected to strengthen in the coming days.
“From an open of K9.95 and K10.00, the local unit traded flat for most of the session before a surge in corporate supply saw it touch a high of K9.93 and K9.98 where it, eventually, closed for the day. The local currency was up two Ngwee for the day but was unchanged on a week-on week basis,” the bank says.
United Bank of Africa (UBA) says the local currency market opened yesterday’s session trading at K9.90 and K9.95 on the interbank.
“The local unit continued on a bullish trend gaining 0.5 percentage point against the greenback. We expect Kwacha to trade in the range between K9.85 and K10.10,” UBA says in its newsletter.

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