Kwacha remains strong
By BUUMBA CHIMBULU
THE bullish case for the local currency against the United States dollar has persisted, as interest from offshore players in the Zambian Kwa- cha dominated bonds con- tinues with the Central bank realises K2.50 billion at Fri- day’s bond sell.
The local currency is cur- rently trading at K15.85 per dollar.
The local unit closed stronger at K15.91 per dol- lar on Friday in compari- son to its opening level of K16.26/16.3156 3384 per dollar on the bid and offer respectively, according to the Zanaco bank newsletter.
Zanaco indicated that the local unit was expected to trade relatively stable in the interim with a stronger bias, as month end inflows are yet to be fully priced in.
“The bullish case for the Zambian Kwacha persisted in Friday’s trading session on the back of improved month end dollar inflows and the anticipated sentiment driven view of a stronger Kwacha in the short term,” it stated.
Meanwhile, with the Kwa- cha named world’s best cur- rency with a 17.8 percent appreciation, a 12 percent dollar bond rally in prices and on August 28, a 600 basis point rally on average across
the bond curve was recorded. Wall Street investment bank JPMorgan had tipped offshore players on attrac- tiveness of Kwacha paper af- ter what it dubbed subsiding political risks after the elec- tion of President Hakainde
Hichilema.
Zanaco stated that bond
auction for Friday last week subscription was at 166.66 percent as out of K1.5 Billion sought at cost, K2.50 billion was allocated at cost.
“Bond auction tender 08/2021/BA saw all yields fall from their previous levels. Two years fell by 690 basis points (bps) to 23.00 per- cent, three years by 749bps
to 24.00 percent, five years by 799bps to 25.00 percent, sev- en years by 410bps to 26.00 percent, ten years by 401bps to 26.99 percent and fifteen years by 590bps to 27.00 per- cent,” it stated.
And Access Bank Zambia indicated that against a to- tal K1.50 billion on offer, the Central Bank was able to re- alize K2.50 billion at Friday’s bond sell.
“Total bids in face value terms exceeded ZMW12.48 billion – with only K4.08 billion allocated. Yields fell across all tenors, the five- year falling the most by 7.99 percentage points,” it stated
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