25 March 2014

Zambia: Kwacha Gains Against Dollar

THE Kwacha surged against the dollar in swing trading as markets continue to digest the impact of recent regulatory changes.

The local currency was overall bullish on the day with large upward moves characterising activity on the day.

It rose sharply in early trade from a previous close of K6.17/K6.19 to K6.09/K6.11 within minutes of market open.

The currency was spurred on in the day by both inter-bank and corporate dollar selling with buyers coming in at intraday lows of K5.90/K5.92.

The Kwacha by close of market was trading at K5.97/5.99, up 21 ngwee on the day and is likely to keep a bullish momentum in the short term trading between K5.90 and K6.10.

Meanwhile, the money market liquidity levels edged upwards, closing the day at K791.55 million from K738.07 million.

Zanaco Bank reports that the amount of funds traded by commercial banks increased to K435.8 million from K344.3 million and the cost of interbank funds fell to 15.04 per cent from the previous day's 15.42 per cent.

With increased market liquidity levels, the overnight lending rate is expected to oscillate between 14.5 per cent and 15.5 per cent in the near term.

And copper steadied on Monday as investors saw last week's fall to three year lows as overdone, and as the latest batch of weak data from China spurred hopes that authorities would introduce measures to support the economy.

All the same, three-month copper on the London Metal Exchange traded up 0.35 percent in official midday rings at $6,503 a tonne, having steadied last week after falling for the three previous weeks.

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