Kwacha hits K8 mark against dollar

THE Kwacha hit K8 mark, the highest depreciation ever recorded on Monday, a survey has revealed.
A check at Fx Africa Bureau yesterday indicated the local unit was buying at K7.85 and selling at K8.00 while on the Bank of Zambia (BoZ) website, it was quoted at K 7.91and K7.93 on bid and offer respectively, by midmorning.

Other Bureaux, Unifinance Bureau and Goldfield were selling and buying at K7.80 and K7.96 and K7.85 and K7.95 respectively.
But Cavmont Bank in its market report issued on Friday says the Kwacha maintained a stable range against the United States (US) dollar for most of the trading session opening at K7.85 and K7.57 and made only marginal movements in either direction as demand was matched by supply.

The bank says an increase in demand on the inter-bank saw the currency pair touch an intra-day low of K7.92 and K7.94, towards close of the trading session.
It says the local unit closed at K7.90 and K7.92, a positive retracement from the day’s low levels but K0.055 weaker than Thursday’s closing levels.

Meanwhile, Finance Bank Zambia in its foreign exchange money market rates says the Kwacha depreciated by K0.065 by 09:00 hours yesterday to trade at K7.86 and K7.99.

Recently, the central bank said to tackle the fall in the Kwacha, it raised the reserve ratio by 400 basis points in April this year to 18 percent following last year’s increase to 14 percent from eight percent.
This tightened liquidity conditions, boosting the interbank rate to 14.6 percent by the end of June from 12.9 percent in March, and helped support the currency but since late May, the Kwacha has again been falling, hit by weaker commodity prices, a growing current account deficit and the strengthening dollar.