ZM Index | Zambia Monitor

Kwacha expected to gain stability even as currency trades at a loss against US dollar

Bumba Mulenga — Sat, 08 Jun 2024 11:41:39 +0000

The Zambian Kwacha is anticipated to gain stability and potentially post short-term gains as United States dollar inflows increase.

On Thursday, the Kwacha was in the red against the dollar, according to Access Bank’s daily market update.

The bank reported that, with a surge in demand for hard currency, dollar trading declined to US$1 million.

“On the market average interbank bid and offer, the USD/ZMW opened at K26.2920/26.3420 and closed at K26.3320/26.3813,” the bank stated.

Absa Bank also noted in its daily market report that the Zambian Kwacha lost further ground against the US dollar on Thursday due to increased demand for the dollar from various market players.

Commercial banks in Lusaka quoted the local unit’s interbank price at K26.300/26.350, where it traded for the majority of the session.

However, it later lost 7.5 ngwee to trade at K26.375/26.425 on the bid and offer respectively, where it closed for the day.

“Short-term, the local currency is expected to trade sideways, squarely depending on demand vs. supply,” Absa indicated.

Elsewhere, South Africa’s rand remained steady on Thursday as markets awaited the outcome of a meeting between senior African National Congress (ANC) leadership figures regarding the future of the country’s government.

The rand traded at 18.9275 against the dollar, about 0.07 percent firmer than its previous close.

The local currency had reportedly tumbled the day before when the ANC announced its intention to form a government of national unity.

WARNING! All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express permission from ZAMBIA MONITOR.

The post Kwacha expected to gain stability even as currency trades at a loss against US dollar first appeared on Zambia Monitor.

$8.5 million support for forex market does little to prop Kwacha, as currency struggles against US dollar

Bumba Mulenga — Thu, 23 May 2024 12:29:17 +0000

The Zambian Kwacha weakened further against the United States (US) dollar in Wednesday’s trading session.

This was despite the efforts by the Bank of Zambia (BoZ) stepping in by offloading US$8.5 million onto the market on Tuesday to relief pressure on the local currency.

During the trading session on Tuesday, the Zambian Kwacha lost more ground against the US dollar, prompting the Central bank to step in.

The BoZ offloaded US$8.5 million onto the market in effort to relieve some pressure off the local currency and partially offset the steadily rising demand for the US dollar.

This, however, did not seem to help much as the local currency the following day, Wednesday, weakened further against the US dollar.

Access Bank in its daily market update showed that the market witnessed a persistent dry spell of dollar inflows while demand for the greenback continued to grow, exerting pressure on the local unit.

“On the market average interbank bid and offer, the USD/ZMW opened at K26.0073/26.0567 and closed at K26.1283/26.1783, respectively.

“The Kwacha is projected to follow a downward trajectory in the near term,” Access stated.

Absa Bank, also indicated that the Zambian Kwacha posted minor losses against the US dollar in Wednesday’s session.

The bank attributed this to the increased demand for the greenback from large corporates and other importers amid thin inflows.

At market open, the local currency was quoted at K25.900/25.950, on the bid and offer, respectively.

“The Kwacha weakened to K26.050/26.100 by midday and closed the day off at K26.150/26.200.

“Near term, we anticipate the local unit’s next move to be dictated by demand and supply dynamics, but the local unit may get some support from the upcoming payroll and wage conversions,” Absa stated.

Elsewhere, the South African rand fell against the dollar on Wednesday as traders awaited Federal Reserve meeting minutes for hints on the interest rate path of the world’s biggest economy.

The rand traded at 18.2475 against the dollar, about one percent weaker than its previous close.

The local currency hit 18.0300 on Tuesday, its strongest level since August.

The post $8.5 million support for forex market does little to prop Kwacha, as currency struggles against US dollar first appeared on Zambia Monitor.

Zambian currency, Kwacha, trades steady against the dollar

Bumba Mulenga — Mon, 20 May 2024 18:29:05 +0000

The Zambian Kwacha in the short term is expected to trade rangebound as supply and demand determine the currency’s ultimate position against the United States (US) dollar.

Friday’s trading session saw the Zambian currency trade steady against the US dollar with little activity seen on the day.

This is contained in the daily market update provided by Absa Bank Zambia on Monday.

The interbank market opened with the local unit quoted at K25.500/25.550 on the bid/offer, until noon where it traded at K25.575/25.625, 7.5 ngwee lower.

“The Kwacha later gained 12.5 ngwee to reach and close on K25.450/25.500 on the bid and offer, respectively.

“Short term, The Zambian kwacha is expected to trade rangebound as supply and demand determine the currency’s ultimate position against the US dollar,” the Bank indicated.

On the money market, the liquidity levels in the market increased to K425.59 million from K386.88 million the previous day.

The volumes of traded funds on the interbank during Fridays’ session decreased to K555.00 million from K K560.00 million, with the weighted overnight interbank rate slightly rose slightly to 20.51 percent from 20.07 percent.

The local market remained subdued, with all yields remaining flat across all tenors.

The post Zambian currency, Kwacha, trades steady against the dollar first appeared on Zambia Monitor.

Kwacha makes aggressive comeback, projected to post gains in the short run

Bumba Mulenga — Mon, 13 May 2024 16:34:50 +0000

The Zambian Kwacha is projected to post gains in the short run as it aggressively pulled back its losses during the Friday trading session against the United States (US) dollar.

Th local unit rallied against the US dollar in Friday’s trading session, according to the Access Bank daily market report.

On the market average interbank bid and offer, the USD/ZMW opened at K27.3493/27.3993 and closed at K27.3017/27.3503, respectively.

“The market witnessed a total dollar trading of 3.2 million while demand for hard currency declined relatively. The local unit is projected to post gains in the short run,” according to the report.

Absa Bank, also in its daily report, showed that the Zambian Kwacha posted gains against the US dollar in Friday’s trading session, as offshore inflows were adequate to support the demand on the day.

The bank reported that the interbank market opened activities with the kwacha quoted at K27.3200/27.3700.

“It experienced a minor dip, settling at K27.3750/27.4250 around noon, but aggressively pulled back its losses to close the day at K27.200/27.250 on the bid and offer, respectively.

“The outlook for the short term indicates the levels of demand and supply to squarely determine the direction the local unit will take,” the bank indicated.

The post Kwacha makes aggressive comeback, projected to post gains in the short run first appeared on Zambia Monitor.

Zambian Kwacha struggles against dollar, amidst supply shortages, to trade above K27

Bumba Mulenga — Thu, 09 May 2024 13:00:42 +0000

The Zambian Kwacha has continued to face challenges against the United States (US) dollar.

Absa Bank Zambia predicted further depreciation in the short term due to a scarcity of US dollar supply amidst increasing demand.

Commercial banks in Lusaka quoted the local unit at K27.075/27.125 before it weakened to K27.200/27.250 by the session’s close.

On Thursday at 08: 40 hours, the local currency was trading at K27.08/27.63 to the greenback.

On Wednesday, the Kwacha held steady against the dollar as demand and supply balanced out. Commercial banks maintained rates at K27.075/27.125 throughout the day.

However, the near-term outlook suggested stability contingent upon consistent inflows.

The post Zambian Kwacha struggles against dollar, amidst supply shortages, to trade above K27 first appeared on Zambia Monitor.

Markets anticipate Kwacha to drop further in value

Bumba Mulenga — Mon, 06 May 2024 10:22:53 +0000

The Zambian Kwacha is anticipated to drop further in value in the near term after it traded on the backfoot of the United States (US) dollar in Friday’s trading session.

On the market average interbank bid and offer, the USD/ZMW opened at K26.9400/26.9900 and closed at K27.0347/27.0847, respectively.

“As the market trend of low foreign currency supply and strong foreign currency demand continued, market participants in need of hard currency expressed concern over the performance of the local unit,” according to a daily market report released by Access Bank Zambia.

Absa bank in its report indicated that short term outlook suggested a potential bearish trend for the Kwacha, as supply remained thin to meet demand.

The report showed that the Zambian currency in Friday’s trading session traded under pressure on a close to close basis as the supply and demand imbalance continues to characterize the market.

“At market open, the local unit at was quoted at K26.95/27.00, where it traded for the morning session before losing five ngwee by mid-day to trade at 27.00/27.06, on the bid and offer respectively, where it maintained until close of market,” he said.

The post Markets anticipate Kwacha to drop further in value first appeared on Zambia Monitor.

Kwacha loses ground despite BoZ’s measures, as currency continues to depreciate

Bumba Mulenga — Tue, 30 Apr 2024 17:42:11 +0000

The Kwacha has continued to depreciate despite efforts by the Bank of Zambia (BoZ) to put in place measures to sustain its trading in the market against the United States dollar.

As at Tuesday, the local currency was sold at K27.0175 per dollar while buying was at K26.5093.

The Kwacha in the short term is likely to trade on the defense owing to low dollar supply to meet demand.

During Friday’s trading session last week, the Zambian currency edged lower as demand for greenback continues to rise amid scarce supply.

A report by Absa Bank Zambia showed that the local currency ultimately settled at K26.600/26.650 and closed market on the same levels.

“At 08:30am, commercial banks in Lusaka quoted the local unit at K26.400/26.450 on the bid-offer until mid-day where it traded 5 ngwee lower to reach K26.450/26.500,” Absa indicated.

About two weeks ago, the Central Bank offloaded US$6.5 million into the market partially meeting increasing demand for hard currency.

Before this development, the BoZ was earlier in the market to defend the Kwacha by offloading US$8.5 million to partially offset increasing demand for the greenback.

The post Kwacha loses ground despite BoZ’s measures, as currency continues to depreciate first appeared on Zambia Monitor.

Bank of Zambia dumps $6.5 million into foreign exchange market to shore up value of Kwacha

Bumba Mulenga — Mon, 15 Apr 2024 09:04:35 +0000

The Bank of Zambia (BoZ), once again, offloaded US$6.5 million into the market partially meeting increasing demand for hard currency.

A week ago, the central bank was in the market to defend the Kwacha by offloading US$8.5 million to partially offset increasing demand for the greenback.

On Friday, the BoZ went into the market to defend the local currency by offloading US$6.5 million.

This is contained in the daily market update prepared by Access Bank Zambia.

According to the report, the Zambian Kwacha traded on the backfoot of the United States dollar in Friday’s trading session.

“On the market average interbank bid and offer, the USD/ZMW opened at K24.9307/24.9793 and closed at K24.9347/24.9827, respectively.

“The Bank of Zambia offloaded US$6.5 million onto the market partially meeting increasing demand for hard currency. The local unit is expected to weaken further in the near term given that dollar inflows remain low,” the report stated.

And, a report by Absa Bank showed that the Zambian currency traded on the back foot against the United States (US) dollar in Friday’s session as supply for greenback in the market remains scanty.

The Bank anticipated that the local currency was likely to post minor losses in the wake of growing demand from merchandise importers and corporates in the short term.

“Commercial banks quoted the local unit’s bid-offer at K24.900/24.950 before losing five ngwee to reach K24.950/25.000, and maintained the same levels until close of market,” according to the report.

The post Bank of Zambia dumps $6.5 million into foreign exchange market to shore up value of Kwacha first appeared on Zambia Monitor.

Kwacha faces pressure against US dollar, minor losses anticipated

Bumba Mulenga — Fri, 05 Apr 2024 16:33:56 +0000

The Kwacha on Friday came under pressure due to the persistent increase in demand for hard currency and low inflow of dollars.

The local currency is, therefore, forecasted to post minor losses subject to market dynamics in the short term.

This is according to Access Bank in its daily market update.

“The Zambian Kwacha was in choppy trade against the United States dollar in Thursday’s trading session.
“On the market average interbank bid and offer, the USD/ZMW opened at K24.6170/24.6670 and closed at K24.6673/24.7167, respectively,” according to the Bank.

Absa Bank, however, in its similar report showed that the trading session saw the Zambian kwacha trade bullish against the greenback.

The bank indicated that this development came about as positive sentiments surrounding the country’s near-term economic position increased dollar supply in the market.

“Commercial banks in Lusaka quoted the local unit at K24.530/24.580 on the bid and offer respectively until mid-day where it traded at K24.500/24.550 and closed market on the same levels.

“Short term, the local currency is likely to trade range bound subject to forces of supply and demand,” Absa showed.

The post Kwacha faces pressure against US dollar, minor losses anticipated first appeared on Zambia Monitor.

Fears of Kwacha trading at a loss mounts, as scarcity of United States dollar persists

Bumba Mulenga — Tue, 05 Mar 2024 07:24:05 +0000

The exchange rate market witnessed a persistent trend of United States dollar scarcity along with a rise in demand for hard currency on Friday, primarily from Oil Marketing Companies (OMCs).

Given that current market dynamics hold, a downward trend for the local currency was anticipated in the near term.

“The Zambian Kwacha posted losses against the United States dollar in Friday’s trading session.

“The Local currency was quoted 0.44 percent weaker against the greenback at 23.548. It was worth 29.8148, 0.70 percent lower than the British pound,” according to the Access Bank Zambia daily market update.

Absa bank Zambia indicated that the local currency weakened further against the United States dollar in Friday’s trading session, driven by robust demand for the greenback amidst thin inflows.

At market open, the local unit traded at K23.550/23.600 in the morning session and remained unchanged to close the week at the same quote.

“The short term is likely to have the Zambian Kwacha face some downward pressure as supply and demand continue to drive the current narrative,” the Bank stated.

The post Fears of Kwacha trading at a loss mounts, as scarcity of United States dollar persists first appeared on Zambia Monitor.