Kwacha trots on impressive path

THE Kwacha is expected to continue its impressive performance benefiting from offshore conversions earmarked for the bond tender that took place last week, financial market players say.
First National Bank (FNB), Zanaco and Cavmont Bank notes that the Kwacha’s performance has continued to be positive against major convertible currencies.
FNB says despite the continued strong performance of the local unit, the market could, however, turn fairly quickly.
In its daily newsletter, the bank says currently, most foreign exchange demand is being delayed as importers bet on the rate coming off further.
“The build-up of demand makes the current downward trend vulnerable to sudden directional change. Levels of K9.80/K9.90 would not be beyond reach,” the newsletter reads.
Zanaco also says the Kwacha is likely to stay strong against the United States (US) dollar in the near term, supported by tight local currency liquidity while demand for the greenback is expected to remain sluggish.
In its daily treasury newsletter, the bank says the local unit is expected to trade in the range of K9.30 and K9.50.
On Tuesday, the Kwacha extended its strong trend against the greenback backed by strong demand for the local unit arising from tight monetary policy and by a sell-off of dollars by market players.
The local unit opened trading at K9.65 and K9.70 and later appreciated to trade around K9.60 and K9.65 through much of the day and closed at K9.50 and K9.55 on bid and offer respectively as corporate interest in the Kwacha dominated.
Similarly, Cavmont Bank in its markers report says the Kwacha continued to perform positively against the dollar on Tuesday following increased support from sellers and exporters.
The Kwacha closed at K9.50 and K9.55 which was K0.1 stronger than the opening level of K9.65 and K9.70.
On the commodities market, the copper price edged up yesterday 0.4 percentage point to US$4,625.50 a tonne, according to Reuters.

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