• The Kwacha traded on the back foot against the greenback on Monday.
• At market open, it was quoted at K21.660/21.710 and closed at K21.670/21.720.
• In the near term, the local unit is anticipated to trade stable.
Absa Bank Zambia says the local currency traded lower against the US Dollar on Monday this week as it continued to hit fresh record lows.
According to its latest market update report, the Bank disclosed that the weakening of the Kwacha was mainly due to persistent dollar demand from importers and commodity traders seeking to pay suppliers to facilitate their daily business transactions.
It explained that the local unit opened the market trading at K21.660/21.710 and closed at K21.670/21.720 on the bid and offer respectively.
Absa further said the Kwacha is in the near term anticipated to trade stable as the country heads deep into the week with support from corporate payroll conversions offering some slight relief.
“In the near term, the local unit is anticipated to trade stable as we head deep into the week with support from corporate payroll conversions offering some slight relief.”
“The liquidity levels in the market significantly reduced in yesterday’s trading session moving to K1, 196.69 Million from K1, 489.47 Million with the volumes of fund traded on the interbank increasing further to K629.00 Million from K613.00 Million seen the previous day. The overnight interbank rate was up a further 4 basis points at 8.52%,” the Bank stated.
Meanwhile, the financial institution noted that the Government Bond Auction held on Friday last week was undersubscribed with only K453.27 Million allocated at cost and an 80% skew towards the two year paper housed at 32%.
“On offer was K1, 500 Million with a total of K1, 664.02 Million bids received. Yields remained flat across all tenors,” it noted.