THE Kwacha, which has been weakening in the past weeks, yesterday strengthened significantly from around K14.5 to the United States dollar to an average of K12.7 against the American currency.
This is the biggest advance among more than 150 currencies.
Financial market analyst Maambo Hamaundu welcomed the appreciation by about 11 percent and said stability of the Kwacha is necessary to ensure confidence in the market.
He said the gain is good but should be sustained.
A check at bureaus de change in Lusaka revealed that the Kwacha was selling between K12.70 and K12.86.
At FX Africa bureau de change, the Kwacha was trading at K12.55 and K12.86 on bid and offer, respectively, while Golden Coin pegged the local currency at K12.50 and K12.75 on bid and offer.
Bank of Zambia (BoZ) pegged the Kwacha at K12.43 and K12.45 on bid and offer, respectively.
According to Bloomberg, the Kwacha gained to trade at K12.38 per United States dollar by 12:04 hours yesterday, after Bank of Zambia sold dollars to stem the Kwacha’s slide after it fell to a record low this week.
The Kwacha gained more than 11 percent to 12.38 per dollar by 12:04 hours, the biggest advance among more than 150 currencies tracked by Bloomberg and most since November 2008.
The currency, according to Bloomberg, is rallying for a second day after falling to an all-time low of K14.6050 on Tuesday.
“With the central bank’s continued intervention, the interbank market is awash with dollars. Commercial banks will probably be selling greenbacks after holding long positions.
“The Kwacha is likely to hold firm against the dollar amid a bullish tone.” Zanaco Bank said in a note issued to Bloomberg.
Meanwhile, Reuters reports that copper prices tumbled to their weakest in more than six years yesterday, weighed down by a strong dollar, weak Chinese credit data and concern about oversupply after inventories rose.
As copper headed towards its fifth losing session out of six, other metals on the London Metal Exchange also declined after heavy selling from Chinese funds and analysts said more losses were on the cards.
Metals were hurt by a rise in the dollar index after the head of the European Central Bank underscored the bank’s readiness to extend money printing.
A firmer dollar dampens demand for metals priced in the US currency, making them more expensive for buyers outside of the United States.
Three-month copper on the London Metal Exchange lurched to a low of $4,800 a tonne, the weakest since July 2009, but recovered slightly to trade down 2.1 percent at $4,841 by 1546 GMT.