TRYNESS MBALE, Lusaka
THE Treasury bill auction and the weak United States (US) dollar are expected to assist the Kwacha to continue trading on a firm note, Finance Bank Zambia says.
In its daily market update, the bank says the local currency opened trading at K7.25 and K7.27, dropping to K7.26 and K7.28 by midday on Wednesday, where it stabilised until the close of the trading session.
â€œDespite the grim position, we expect to see a fairly bullish Kwacha on the back on conversions for the Thursday [yesterday] treasury bill auction, and a generally weak greenback,â€ the statement reads.
The bank, however, however quoted, Bank of ZambiaÂ governor Denny Kalyalya as saying the reduction of mineral royalties for underground mines to six percent from nine percent will boost the Kwacha, but it had no impact on the local cuarrency, as it continued its slide against the dollar.
Similarly, Zanaco Bank in its daily treasury newsletter says the Kwacha is expected to maintain a narrow trading range, and fluctuate between K7.20 and K7.30 in the near term, with most players sitting it out in the hope that the Treasury bill auction could give the local unit some support.
On Wednesday, the Kwach weakened modestly on the back of strong demand for dollars from commercial banks.
The Kwacha opened trading at commercial banks at K7.25 and K7.27, unchanged from the previous days close.
It says much of the appetite of the dollar was interbank-driven on Wednesday which witnessed the Kwacha touch a low of K7.26 and K7.28 in the late session.
The local currency closed 0.05 ngwee weaker trading at K7.26 and K7.28 on the bid and offer, respectively.
Meanwhile, Cavmont Bank says the Kwacha closed trading at K7.26 and K7.28, which was K0.02 weaker than the previous day.
â€œWednesdayâ€™s trading session saw the Kwacha depreciate further by 0.41 percentage point against the dollar following increased demand on interbank, while supply has remained static,â€ the bank says in its market update.
The local currency opened trading at K7.24 and K7.26, and touched a low of K7.270 and K7.290 during noon trading.
TRYNESS MBALE, Lusaka