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Importers ride on kwacha’s low level to trade

THE kwacha last week posted a slight depreciation after trading on a strong note for most of the week.

Later in the week, importers took advantage of the low levels to buy the US dollar, pushing the rates to around K9.57 and K9.62 for buying and selling respectively.

“The kwacha looked set to depreciate when a few importers appeared on the market to take advantage of the low levels. USD/ZMW closed at 9.570/9.620 (on Wednesday) – slightly higher than the previous close…,” according to FNB Zambia’s daily market update. “Our view is more inclined to bullish, but will be skewed towards bearish due to subsided supply…Most taxes such as VAT have been settled by most corporates.”

It stated that there was little activity in money markets last week.

“With market liquidity still north of 1 billion, there was little activity in the money markets – only a nominal amount traded. The central bank is still actively lending money via OMO (Open Market Operations), continuing to inject liquidity in order to drive down the interbank rate. However, the rate appears to be sticking to current levels, trading at 10.04 per cent during the day, little changed from the previous day’s rate of 10.02 per cent,” stated FNB Zambia.

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