Kwacha expected to stabilise

By BUUMBA CHIMBULU

THE Kwacha is expected to trade stable as demand in the market seems to be slowing down while corporates seek to pay for their local tax obligations.

The Kwacha/United States dollar pair is expected to take signals from supply and demand as other key fundamentals are in a deep slumber, according to Zanaco Bank Plc in its daily treasury newsletter.

“Thursday-USD/ZMW, bears were not hard to find for the Kwacha in yesterday’s session, pushing the local unit lower to K15.8700/15.9200 per dollar at the close of business.

“The local unit closed a tad softer against its opening level of K15.8500/15.9000 per dollar on the bid and offer respectively. We expect the local unit to trade stable as demand in the market seems to be slowing down,” Zanaco stated.

Access Bank Zambia also stated that demand for the dollar maintained a previous day’s high which remained unmet by supply on the market. According to Access Bank, the Kwacha was expected to exhibit some stability as corporates seek to pay for their local tax obligations.

Elsewhere, the dollar hit a fresh 24-year peak against the yen on Thursday, after a blistering United States inflation report that opened the possibility of a 100-basis-point interest rate hike at next month’s Federal Reserve policy meeting.

The dollar rose as high as 147.57 yen, the highest since August 1998.

South Africa’s rand weakened in early trade on Thursday, as traders braced for United States consumer price inflation data, which was expected to spur further Federal Reserve rate hikes.

The rand traded at 18.3800 against the dollar, 0.44 percent weaker than its previous close. The USD-ZAR is currently treading water around 18.30000, with a break towards 18.5000.