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Kwacha depreciated by 0.15 percent last week – Economist

• When the Bank of Zambia was in the market selling FX on Monday, Tuesday and Friday, the Kwacha traded stronger.
• When they were not in the market on Wednesday it traded weaker but by a very slight margin.
• Last week it depreciated by 0.15 percent, that was on Wednesday and Thursday.

An Economist has disclosed that the Kwacha depreciated by 0.15 percent on Wednesday and Thursday last week when Bank of Zambia was not in the market to sell Foreign Exchange (FX).
Gerald Soko told Money FM News in an interview that when the Central Bank was in the market on Monday, Tuesday and Friday, the Kwacha traded stronger, but lost minimal strength on Wednesday and Thursday.
Mr. Soko explained that demand for the US dollar is on the same path, adding that private flows on the interbank market have also started improving, with supply support from the Central Bank.
“When the Bank of Zambia was in the market selling FX on Monday, Tuesday and Friday, we saw it trading stronger and when they were not in the market on Wednesday it actually traded weaker. Suffice to say that those movements were pretty much tight, the end result was a Kwacha that was weaker but by a very slight margin. Last week it depreciated by 0.15 percent, that was on Wednesday and Thursday pretty much because the Central Bank was not in the market to support it.”
“Speaking to the fact that demand is on the same path, but of course in addition to supply support that is coming from the Central Bank, we have seen lately that private flows on the interbank market have also started improving obviously linked to sentiment positivity as regards what is happening in the fiscal, Zambia getting financing assurances from external creditors as the country seeks to restructure its debt. So that’s the Kwacha itself, pretty much stable with a weaker bias but very minimal last week,” Mr. Soko said.
Meanwhile, Mr. Soko said the local currency is this week expected to trade range bound on account of FX supply support from the Central Bank and positive sentiments.
“I think the terrain is going to be the same this week, we still expect the Kwacha to trade range bound, moving within a very tight margin. The drivers are going to be the same, the positive vibes are still around and so we don’t expect it to post significant movements, either appreciation or depreciation. So stability is expected to continue this week.”
‘Bank of Zambia comes through to support FX to the market considering that the flows that previously would come to the market, from the mining sector are now going straight to the Central bank. So what you have is a situation where the majority of the supply in the market is actually moving from the central bank to the market,” he stated.
The US Dollar is buying at Fifteen Kwacha Fifty Six Ngwee and selling at Fifteen Kwacha Eighty Seven Ngwee.

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