- Goal Diggers
- Guest Diggers
Kwacha to average K14.40/dollar in short-termBy Stuart Lisulo on 16 Jan 2020
The kwacha is expected to remain under pressure, depreciating against major currency convertibles, to end the mid-way point of this month at around K14.40 per dollar owing to a resumption in high demand for the greenback versus little supply.
According to market players, the kwacha depreciated to hit the K14 per dollar psychological barrier three times last year, closing 2019 at the same position it was in November and last May.
The local currency maintained its weak position by Wednesday, continuing its depreciating trend to now average K14.36 and K14.41, according to the Bank of Zambia (BoZ), from an average K13.70 per dollar three weeks ago.
According to FNB Zambia Limited, the kwacha is likely to continue weakening in view of increasing demand for the greenback compared to limited supply.
“Demand for US dollars persists against reducing supply pressure, which has been to the upside. The local unit is likely to remain under mild pressure for the rest of the week. We expect USD/ZMW to close the week above K14.40,” FNB stated in a daily market update released, Wednesday.
It, however, forecast that the local unit would recover during the medium-term on the back of improved copper prices on the international market, which have remained bullish at over US $6,200 per tonne since the turn of the New Year.
“In the medium-term, however, the kwacha should get a boost from improved copper prices. Some mine taxes are a function of the price of copper — as the price goes up, so do tax payments,” stated FNB.
“Meanwhile, liquidity in the cash market has continued to exit through the settlement of taxes. Liquidity was at K0.8bn (K800 million) at the end of yesterday (Tuesday). With banks projected to have limited liquidity, their participation at the auction may be limited. The auction will, thus, not record a strong performance.”
And Cavmont Bank equally projected that the local currency would receive support from the diminishing liquidity on the local financial market.
“With the withdrawn kwacha liquidity in the market, we expect the local unit to receive support in the near-term,” stated Cavmont in its market report released, Wednesday.
During 2019, the kwacha depreciated to an all-time high of an average K15.31 per dollar in early December, losing value of around 8.56 per cent in a space of just three weeks from mid-November.
The kwacha’s depreciation to historic levels came in the wake of expensive electricity and fertilizer imports into the country last November.
About Stuart Lisulo
Stuart Lisulo is an experienced journalist with a focus on business news.
Email: stuart [at] diggers [dot] news
- Absa re-opens Centro Mall branch - 4 Apr 2020
- Kwacha nears 19 per dollar - 2 Apr 2020
- Zesco’s demands to adjust BSA would’ve been injurious to our business – CEC - 2 Apr 2020
- COVID-19 will trigger major global economic recession, warns World Bank - 25 Mar 2020
- Lungu holds nation address on COVID-19 at 11:30hrs - 25 Mar 2020
- COVID-19 is airborne? Why is Ministry of Health misleading us? (22,851 views)
- Kampyongo says accusing him of being in quarantine is like alleging that Diggers editor is HIV positive (5,546 views)
- I am under quarantine, but fine - Davies Chama (5,446 views)
- Why whip patrons if there's no lockdown? (4,333 views)
- Kampyongo, Ng'andu released from quarantine after testing negative to COVID-19 - Chilufya (4,291 views)
Subscribe for news email alerts
ArchivesMay0 PostsJun0 PostsJul0 PostsAug0 PostsSep0 PostsOct0 PostsNov0 PostsDec0 Posts
- «April 2020»
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- Govt declares UNZA new residence a quarantine facility
- Govt will start distributing free masks – Chilufya
- Absa re-opens Centro Mall branch
- Kampyongo, Ng’andu released from quarantine after testing negative to COVID-19 – Chilufya
- COVID-19 is airborne? Why is Ministry of Health misleading us?
- Kampyongo says accusing him of being in quarantine is like alleging that Diggers editor is HIV positive
- STAY HOME & STAY SAFE…ORDER YOUR PRINTING SERVICES ONLINE!
- We’ve engaged church leaders to persuade Chishala on Bill 10 – NDC
- UNZALARU calls for reversal of the appointment of UNZA Dean of Students
- I am under quarantine, but fine – Davies Chama
- We won’t reduce load shedding despite COVID-19 – Zesco
- Milupi wonders how govt will pay newly recruited nurses, doctors with depleted treasury
The News Diggers
Deputy News Editor
[search_popup]Send this to a friend