THE Kwacha is anticipated to trade on an upward trend as corporates off-load United States (US) dollars to meet tax obligations due this month-end, a financial market player says.
Zanaco Bank says the local unit is likely to firm as corporates convert foreign exchange to pay tax obligations amid broad dollar weakness.
The banks says in its treasury newsletter that the Kwacha which has been steady since Wednesday on the back of weak demand for dollars as businesses slow-down ahead of Easter Holiday is anticipated to continue on a firm footing.
On Wednesday, the local market opened the morning trading session at K11.32 and 11.34 on the bid and offer respectively with the Kwacha appreciating in the afternoon and closing the trading session at K 11.29 and K11.31.
“The afternoon trading session saw the Kwacha appreciate to close at K 11.29 and K11.31 due to continued greenback supply from corporates seeking to settle month end obligations,” the bank says.
On the regional front, the South African rand retreated against the dollar in early morning trade, mainly reflecting the greenback’s gains spurred by expectations of higher US interest rates this year.
According to Reuters, the rand was at 15.4240 to the dollar, down 0.4 percentage point from its New York close on Wednesday.
Government bonds were similarly weak, with the yield for debt maturing in 2026 adding four basis points to 9.365 percent.
In other currencies, both the Nigerian naira and the Kenyan shilling have remained stable trading at 198.9 and 101.452 against the dollar respectively, according to fxexchangerate.com.
Zambia Daily Mail