• Kwacha traded firmly on Tuesday.
• Low dollar supply amid increasing Covid-19 cases necessitated the stability.
• Local currency is anticipated to continue trading on the back foot.
Absa Bank Zambia says the Kwacha was firm in Tuesday’s trading session characterized by moderate market activity.
According to the Bank’s latest market update, the moderate market activity is due to low dollar supply amid increasing Covid-19 cases in the country and around the globe.
It said the local unit traded firm throughout the day as the rates remained unchanged until close of business, as it opened the market at K21.25 and K21.30 per dollar.
“With dollar appetite still unmet by dollar supply, the local currency is anticipated to continue trading on the back foot in the short term,” the Bank noted.
It further said volumes of funds traded on the interbank in Tuesday’s trading session increased further from K594.50 million to K725.00 million, while liquidity levels continued on the same trajectory and reduced from K2, 621.47 million seen in the previous day to K1, 856.72 million.

“The weighted overnight interbank rate increased from 8.21% to 8.24%. The local market was subdued in yesterday’s trading session with yields remaining unchanged across all tenors,” it stated.

Meanwhile, Absa said Oil prices have escalated today Wednesday January 13 2021, with U.S. crude gaining for a seventh day, after an industry report showed a further drop in inventories and investors shrugged off worsening developments in the pandemic.

It observed that Brent crude was up 47 cents, or 0.8%, at $57.05, having risen 1.7% in the previous session.