The Zambian kwacha has continued on its depreciating trend against major convertible currencies, with the South African rand now catching up with it to trade at K1 to R1, for the first time since rebasing.
For the greenback, several commercial banks had quoted the selling rate at over K14.70, a clear sign that the local currency will more likely breach the K15 psychological barrier by year end.
Market experts at FNB Zambia have cautioned in a daily market update that gloomy sentiments on the foreign exchange market will continue to affect the kwacha.
“The local unit continues to weaken against a basket of major currencies. Gloomy sentiments continue to work against the kwacha. At these levels, corporate and commercial dollar importers are finding it very difficult to stay afloat, while exporters take a step back with the view that the kwacha will depreciate further. USD/ZMW closed Monday crossing the psychological level of 14.50 from an opening of 14.42 on the bid,” FNB stated.
The experts are pinning hopes on monthend obligations that could trigger some level of appreciation for the kwacha.
“It is month-end time, which means obligations need to be met. Our hope is that the expected dollar supply will hold the kwacha firm, but until this supply is felt, the sour path for the local unit will continue,” stated FNB Zambia.