THE kwacha last week posted gains against the US dollar to trade between K9.43 and K9.48, the lowest levels last seen in September 2017.
The appreciation of the local currency which for most part of last year saw insignificant movements was necessitated by exporters’ demand for kwacha to meet month-end targets, the FNB Zambia states in its daily market update.
“The local currency’s performance last week was marvellous. With many exporters trying to meet their month-end targets, the demand for the kwacha increased,” FNB Zambia stated.
Trading last week, however, closed on a slightly higher level, with chances of a little further depreciation foreseen.
“The market closed slightly higher at 9.450/9.500 after slipping, possibly from position covering. We expect to see the local currency slightly depreciate this week due to a small increase in the demand for the greenback,” FNB stated.
On the Open Market Operations (OMO), there was no participation during last week’s trading.
“The central bank was in the market again. However, there were no participants in the market. Liquidity has increased to K505m and this might be due to OMO maturities. The interbank rate edged slightly higher by 0.01 per cent, reaching 9.01 per cent from the previous day,” stated FNB Zambia and further highlighted that Treasury Bills auction and the CPI announcement are due this week.