[2008-07-23]  Short dollar supply affects Kwacha
THE Kwacha is likely to be trading in a wide range of K3,300 to K3,450 this week and next week due to reduced United States dollar supply.

The trend is likely to continue until the month end when corporates are expected to return to the market to buy foreign currency and meet local Kwacha obligations.

This is according to the Finance Bank’s Treasury Market report obtained by the Mail in Lusaka yesterday.

Reviewing the foreign exchange market for last week, the bank said the Kwacha was under pressure as demand for the dollar outweighed
supply.

The Kwacha opened last week trading at K3,280 on bid and K3,300 on offer against the dollar on the inter-bank market.

The report says it slipped to K3,335 and K3,355 for buying and selling by the end of business on Monday.
Pressure on the Kwacha continued on Tuesday which saw the local currency touching an intra-day low of K3,420 and K3,440 before rebounding to close the day at K3,390 and K3,410.

The bank attributes the rebound to some players converting dollars to take advantage of the Kwacha’s firm levels.

On Wednesday, the Kwacha continued on its recovery process and recorded an intra-day high of K3,350 and K3,370 before retreating to K3,370 and K3,390 levels by close of business on the day.

The report notes that the Kwacha remained relatively stable at the Wednesday levels for the rest of the week in mixed trading.

It closed the week at K3,365 for buying and K3,385 for selling.




Source: © 2005 Zambia Daily Mail.