TRYNESS TEMBO, Lusaka
THE Kwacha is likely to persistently trade on an upward trend against the United States (US) dollar supported by a cocktail of financial support, financial market players note.
Both Zanaco and United Bank for Africa (UBA) says the local unit is expected to continue trading with a strong footing against the greenback supported by inflows from corporates coupled with yesterday’s treasury bill auction.
“The Kwacha is expected to continue trading with a bullish [strong] tone against the dollar on the back of strong corporate and interbank inflows as well as yesterday’s Treasury bill auction.
“The local unit trading range is expected to be between K9.02 and K9.12,”the bank says in its daily treasury newsletter.
On Wednesday, the Kwacha experienced further gains against the dollar aided by inflows from the settlement of last week’s bond auction.
Zanaco says continued corporate dollar selling, coupled with the bond settlement in the face of scant greenback demand, saw the Kwacha touch a high of K9.04 and K9.08 on the bid and offer respectively, where it closed off the day gaining six ngwee.
UBA in its treasury newsletter also says the local unit has continued trading on a strong note against the greenback supported by inflows from foreign investors that took part in the bond auction.
Meanwhile, First National Bank says after a persistent spell on the open market operations (OMOs), the Bank of Zambia (BoZ) finally stayed away from the market as bond purchases put further strain on liquidity on Wednesday.
The BoZ participates in the OMO, which is an activity by the central bank to take liquidity from a bank or a group of banks. Liquidity levels are currently at K295.12 million.
On the commodities market, copper price yesterday steadied to near one-week lows as the dollar eased back from highs triggered by a Federal Reserve meeting that clouded the outlook for the pace of future interest rate rises to trade at US$5,845 a tonne.