‘Copper prices brightens Zambia economic prospects’

Tue, 06 Feb 2018 08:16:49 +0000

By BUUMBA CHIMBULU

ZAMBIA’S fiscal consolidation efforts, favourable copper prices and stable Kwacha have brightened the country’s economic prospects, says First National Bank (FNB).

FNB Zambia is optimistic that the country’s economic prospects continued to be bright following the strong macroeconomic fundamentals such as rising copper prices and stable Kwacha.

FNB Zambia reports in its daily newsletter that the Kwacha looks poised to pare some of the losses it suffered at the tail end of last week.  “Since the beginning of the year, the local unit has traded on firmer footing. In fact, even when on a weakening streak, the peaks (weakest Kwacha points) have been getting progressively lower. Thus, the trend points to a stronger currency, “The country’s fiscal consolidation efforts and the favourable copper prices have brightened the economic prospects. The week’s resistance is seen at 9.900 while support is at 9.700,” said FNB.

And Cavmont Bank Zambia daily market report indicates that the currency pair tracked other currencies which traded softer against the Dollar after better than expected employment figures out of the United States.

The financial market is optimistic the local unit is expected to gain support in the coming week when exporters start converting to meet their mid-month obligations.

The Kwacha closed at 9.825 / 9.875, which was much unchanged from the day’s opening levels of K9.800 / K9.850.

Copper prices have remained resilient on the international market with a tonne trading above US$7, 000 as the Kwacha as continued to hold still against the Dollar.

Copper prices which have risen to US$7,312.50 in 2018 have continued with their positive performance with expectations that the prices will hit US$7,720 a tonne in 2019.

These prices are expected to rise to over US$7,280 a tonne in 2018 and US$7, 720 a tonne in 2019, against US$6,100 in 2017.

Analysts say China’s copper demand growth may be as high as three percent in 2018 from around two percent last year.

The metal started 2018 on a firmer ground with prices reaching a stage last seen in January 2014 after peaking at US$7,312.50 on December 28 2017.