Business

Kwacha staggers

By BUUMBA CHIMBULU

INTERIM trends suggest that the local unit will likely trade between K21.80 and K22.50 in the short to medium term with a minimal bias to the upside.

According to Cavmont Bank Zambia, the Kwacha on Thursday this week made a further movement to the downside against the U.S dollar.

Cavmont in its daily market update indicated that the local unit began the day trading at K21.73 / K21.78 but was soon seen trading at K21.78/ K21.83 on the back drop of continued heightened demand.

“Trading activity was largely flat during the session, with little or no inflows being seen from sellers,” the Bank said.

Cavmont indicated that the local currency on Wednesday made a further movement to the downside against the United States dollar.

“The local unit began the day trading at K21.68/ K21.73 but was soon seen trading at K21.70/ K21.75 on the back drop of continued heightened demand.

“Trading activity was largely flat during the session, with little or no inflows being seen from sellers,” the Bank said.

Absa Bank Zambia also said the Kwacha was relatively stable on Friday last week in a rather quiet trading session with the market remaining subdued as dollar supply to facilitate the increasing greenback demand contracts stayed thin.

Absa anticipated that the local unit to trade steady in the short term mainly on the back of corporates payroll conversion that are expected in the days to come.

“Opening the day at K21.630/21.680, 2 ngwee shy of its previous day’s close of K21.610/21.640 per dollar, the local unit traded flat in both the morning and afternoon sessions and closed the week unchanged,” Absa said.

Meanwhile, London copper prices extended gains on Monday to cross the US$9,000-a-tonne level for the first time since September 2011.

This was driven by a weaker dollar and hopes that demand in top consumer China will pick up after the Lunar New Year holiday break.

Three-month copper on the London Metal Exchange climbed as much as 3.3 percent to US$9,199 a tonne, the highest since September 2011.

The contract is now 10 percent below the all-time high of US$10,190 a tonne touched in February 2011.

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