Treasury bill auction to boost Kwacha

YESTERDAY’S treasury bill auction, coupled with corporates selling the United States (US) dollar to settle their mid-month tax obligation, is expected to provide support to the Kwacha, Zanaco has predicted.
In its daily treasury newsletter, Zanaco forecasts the local unit to trade in the range of K9.90 and K10.00.
“The Kwacha is likely to float within a slim range between K9.90 and K10.00 as corporates sell dollars to settle their mid-month Kwacha obligations coupled with support from today’s [yesterday] treasury bill auction,” the newsletter reads.
On Wednesday, the Kwacha was marginally weaker due to dollar demand from corporates, with traders anticipating the local currency to gain in sessions ahead on the back of mid-month tax payments.
The local unit opened trading at K9.90 and K9.95, unchanged from Tuesday’s close and later touched an intraday low of K10.00 and K10.05 in the afternoon session before finally closing the day five ngwee shy of its low at K9.95 and K10.0 on the bid and offer respectively.
Cavmont Bank in its market report also says the Kwacha closed at K9.90 and K9.95 on Wednesday, K0.025 stronger than the day’s opening levels.
The local unit remained steady against the dollar on Wednesday despite other emerging market currencies and major convertibles coming under pressure against the dollar.
The local unit opened at K9.92 and K9.97. However, the currency pair traded at this level for most of the day until the afternoon when it was later being traded at K9.91 and K9.96.

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