Kwacha continues ‘up and down’ movement
By BUUMBA CHIMBULU
THE local unit is set to continue to trade above the current level in the short to medium term with the interbank trading at K21.450 for a dollar.
The market has continued experiencing a mismatch in demand and supply, with little or no inflows being seen from sellers – a situation that seems to characterize the market recently.
According to Cavmont Bank Zambia daily market report, the USD-ZMW currency pair began the month trading at K21.410 / K21.460 up from levels of K21.390 / K21.440 seen the previous week.
And Zambia Industrial Commercial Bank (ZICB) says the Kwacha on Monday remained unchanged against the dollar which was generally on the back foot against most currencies.
ZICB indicated that limited supply of the hard currency on the local market kept the currency pair within the range of 21.390 and 21.460, levels which were seen in the previous week.
“The Kwacha closed at 21.400/21.450, not far off from its opening levels,” ZICB said in its daily market report.
In other news, copper retreated briefly and was being quoted at $7,856 per tonne, compared to the US$8,000 per tonnne seen recently. Elsewhere, South Africa’s rand traded firmer early on Monday, adding to gains at the end of the previous week as yield-seeking investors made tentative bets on the volatile currency amid risk aversion elsewhere in emerging markets.
The rand was 0.36 percent firmer at 15.1025 per dollar against an open of 15.1900.
The rand continued to defy the broader slide in emerging market currencies, although it remained in a range near the 15.00 bottom targeted by bulls, as the relatively high yield on offer kept buyers in play.
Global investors have mostly opted for safe-haven bets, wary of the ongoing battle on Wall Street between hedge funds and retail investors. That has pushed up dollar buying, hurting risk assets. But with interest rates set to remain steady locally, even as monetary and fiscal stimulus in the United States and Europe remains expansionary, the rand is an attractive carry trade offering healthy returns against near-zero rates in the developed economies