9 January 2013

Zambia: Kwacha Loses Two Ngwee Against Dollar

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American Dollar

THE Kwacha yesterday, lost two Ngwee as it continued its bearish run against the United States dollar, Zanaco daily newsletter has said.

The Kwacha opened the market at KR5.270/5.290, Two Ngwee lower than Friday's closing level of KR5.250/5.270.

It then proceeded to close trading at KR5.290/5.310 after having briefly touched a session low of KR5.3150/5.3350.

The report indicated that with inflows having waned slightly, strong dollar demand continues to be the major driver of the local unit depreciation.

With the KR5.300 psychological barrier having been breached, the near term could see the Kwacha touch the KR5.350 level on the wide side.

On the money market, the report said the market experienced a significant drop in liquidity levels.

Further, the Banks aggregate current account balance decreased to KR2 4373 million from the previous session's KR2 807.6 million.

There was a significant fall in the overnight interbank lending rate, which was down by 75 basis points to end the day at 7.35 per cent from 8.10 per cent.

The volume of interbank funds traded on the day more than quadrupled from KR12.5 million to end the day KR54.5 billion. In the near term the interbank lending rate is expected to continue trending downward and should range between 7.00 per cent and 7.50 per cent.

According to Standard Chartered Bank daily newsletter, the local unit saw flows on the inter-bank mainly driven by the mining sector.

The report said the market continued to have demand from the small and medium enterprise (SME) sector and local corporates.

The market opened at 5.210/ 5.230 and was expected to close the day at 5.270/5.290.

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