THE kwacha has again broken the K10 psychological barrier as demand for the US dollars continues to outweigh supply, according to financial market players.
A few weeks ago, the kwacha appreciated to around K9.20 per dollar, a scenario that the government rode on to show the nation ‘what had been achieved’.
But the local currency’s strength could not hold as demand for the dollar started to pick, putting the local unit under pressure to trade between K9.98 and K10.01 per dollar by Thursday last week, according to the Bank of Zambia.
And FNB also stated that the situation on the foreign exchange market has not changed since the beginning of May, as demand for dollars has continued to pile on significant pressure on the kwacha, with trades breaking through the K10.00 per dollar mark.
“Supply continues to be intermittent with no respite expected until possibly towards the end of the month when exporters are expected to make some conversions,” stated FNB.
And Cavmont Bank stated that the local unit broke through the K10.00 psychological barrier by noon last Thursday.
“By midday [on Thursday], the local unit breached the K10.00/$1 barrier and the dollar was being quoted at K10.00/K10.02,” stated Cavmont in a market report.