Commodity price to determine Kwacha’s direction
THE Kwacha’s performance is anticipated to be influenced by the commodity prices, Barclays Bank Zambia (BBZ) Plc has observed.
According to the latest BBZ Market Update issued in Lusaka yesterday, the bank observes that the short-term outlook remains within a K4,800 to K5000 band against the United States dollar. The newsletter says market players will keenly watch commodity prices for cues on the currency’s direction.
On Wednesday, the Kwacha opened at K4,910 and 4,930 for selling and buying per dollar on interbank session. The bank says activity on the dollar demand side put pressure on a weakening Kwacha, which slid to K4,920 and K4,940 per dollar in mid-morning trades.
“Foreign currency inflows aided the Kwacha in a short-lived appreciation to K4,900 and 4,920 per dollar. The day’s trading however, saw the Kwacha close at K4,910 and K4,930, as supply was counteracted by demand,” it says.
On the money market, BBZ says the Central Bank was in the market purchasing a total of K200 billion in term deposits on Wednesday. And Standard Chartered Bank says it expects the Kwacha to still be under pressure as players observe the euro.
The Standard Chartered Bank daily brief says the Kwacha lost further ground on Wednesday opening higher at K4,885 and K4,905 from its previous close of K4,850 and K4,870 for selling and buying respectively.
The bank says “we expect the local unit to still be under pressure today as players closely watch the euro for direction in the absence of real flows.”
[Daily Mail]
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