23 January 2013

Zambia: Kwacha Drops Further

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American Dollar

THE Kwacha weakened further against the greenback on Monday, losing 60 Ngwee on the day, having opened inter-bank trading at KR5.270/5.290 on the bid and offer respectively.

The Zanaco daily newsletter said the local unit weakened against the greenback but a surge in demand for dollar later in the day placed pressure on the local unit and pushed it over the KR5.300 level to end the day at KR5.330/5.350.

The report said the Kwacha's depreciation was on the back of very thin dollar supply and strong demand for the dollar from inter-bank players.

Further, the local unit remains susceptible to losing more ground against the dollar and could trade above the KR5.350 level on inter-bank.

Meanwhile, copper was little changed in thin trade on Monday as a political attempt to break a budget impasse in the United States revived risk appetite, but was offset by still weak physical demand from top consumer China.

Reuters said the three-month copper on the London Metal Exchange edged down 0.1 per cent to close at US$8,055 a tonne in low volumes due to a US market holiday for Martin Luther King day.

Commenting on oil prices, Reuters report said Brent crude oil slipped below US$112 a barrel on Monday, ending a three-day rally, as pessimism over global economic growth returned traders' focus to healthy supply levels, offsetting fears of unrest in North Africa.

March Brent crude futures settled down 18 cents at $111.71 per barrel.

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