Kwacha firms against the dollar
Written by Millennium on June 28, 2019
SUN BUSINESS REPORTER writes
THE Zambian Kwacha was firm against the dollar on Tuesday, helped by tight liquidity in the local money markets and subdued dollar demand from importers.
Opening the day unchanged from Monday’s close of K12.950/13.000 to the dollar, the local unit traded flat in both the morning and the afternoon session to close at its opening levels.
According to Barclays Bank Zambia market update, the Kwacha was likely to continue to trade range bound in the near term.
On money market, the bank reported that liquidity levels in the local money markets sharply to close at K489.72 million from K1,373.87 billion due to Vat payments with the volumes of funds traded also closing low at K100 million from K423.00 million seen on Monday.
The cost of borrowing funds on the interbank also pushed up to 10.50 percent from 10.37 percent due to the tight liquidity.
It further reported that there was little change in the local markets with yields remaining relatively unchanged.
On international commodity markets, the bank reported that oil prices rose more than 1 percent on Wednesday to their highest in nearly a month as industry data showed US crude stockpiles fell more than expected, underpinning a market already buoyed by worries over a potential U.S.-Iran conflict.
Front-month Brent crude futures, international benchmark for oil, were up 1.3 percent at $65.91 by 0341 GMT. They earlier touched their highest since May 31 at $66 a barrel.
On gold, Barclays reported that prices retreated from a six-year high on Tuesday after comments from U.S. Federal Reserve officials trimmed expectations that the central bank will lower interest rates by half a percentage point next month.
Spot gold was up 0.3 percent at $1,423.26 per ounce.. Prices had touched a high of $1,438.63 in the session, a level last seen in May 2013, and were set for a sixth straight sessions of gains.
Copper prices reached a one-month high on Tuesday as a strike at a major mine in Chile underlined a supply shortfall, although investors were on edge ahead of U.S.-China trade talks later this week.
Benchmark copper on the London Metal Exchange (LME) ended up 1.4% at $6,042 a tonne after touching $6,051.50, the highest since May 21.