Kwacha expected to gain

BUUMBA CHIMBULU writes @SunZambian THE Kwacha is expected to receive some support as corporates and exporters convert for quarterly and mid-month tax obligations, Cavmont Bank Zambia has said. Cavmont indicated that with supply still remaining scarce, the Kwacha again moved a notch lower against the United States dollar on Thursday. According to Cavmont, this was as the Kwacha was trading at K21.18/ K21.23 from the previous day’s closing rate of K21.17/ K21.22. “The local unit is however expected to receive some support in the coming week as corporates and exporters convert for quarterly and mid-month tax obligations,” Cavmont said. Last week, Absa Bank Zambia indicated that the Kwacha held firm against the dollar for three consecutive day in Thursday’s trading session. According to Absa, demand for the greenback continued to dominate the markets as corporates from various sectors of the economy continued to hunt for foreign currency. “The local unit opened and closed at K21.1550/21.2050 per dollar, same as the previous day’s close as market activity remains relatively low with most corporates still on industrial break “In the near term, we still anticipate the Kwacha to trade on the defensive as dollar supply still remains thin in the market,” Absa said. In other emerging markets, the South African Rand came under pressure against the US dollar as it touched an intra-day low US$/ZAR15.3627. The weakening of the Rand was mainly driven by market sentiment following speculation of further lockdown restrictions to be implemented to contain the worsening Covid-19 infections.