KWACHA STABLE FOR NOW

BUUMBA CHIMBULU writes SUPPLY pushed through from the mining sector generally stabilised the current demand and put the market into steadiness. Market activity had continued to be subdued during these economic hardships as most business operations had been affected by the coronavirus pandemic, says Absa Bank Zambia. The Bank in its daily market report indicated that the local unit traded flat in Wednesday’s session. “The commercial banks were quoting the kwacha at k18.65/18.70 on the bid and offer respectively which was maintained until close of business. We anticipate that the Kwacha will continue to trade range bound in the short term,” Absa said. Zambia Industrial Commercial Bank (ZICB) said the Kwacha on Wednesday was generally stable against the United States dollar and traded in the range 18.630 and 18.700.  As at close of trade, ZICB said, the Kwacha was being quoted at 18.650/18.700 and was likely trade within current levels in the short term. “Globally, the US Dollar strengthened after the USA and other countries moved towards easing some of the restrictions that were meant to curb the Coronavirus,” ZICB said. And Cavmont Bank Zambia said the Kwacha remained unchanged against the dollar as it continued trading at K18.650 / K18.700, a level it maintained at close of business.  Cavmont said the Kwacha seemed to have established a new equilibrium level above the US$1/K18.000 mark despite having witnessed an increase in inflows in the past weeks which saw it touch intra-day highs of $1/K18.200 on the interbank offer. “In the interim, we expect the Kwacha to remain range bound with very little movement to the downside owing to low business activity from most corporates and Small and Medium Enterprises,” Cavmont said. Elsewhere, the South Africa’s rand was weaker early on Tuesday, reflecting worries over how the country would fund a 500 billion-rand (US$26.5 billion) rescue package for its bruised economy.  The rand traded at 18.8650 versus the dollar, 0.4 percent weaker than its previous close. The rescue package announced last week, includes a 200 billion-rand loan-guarantee scheme to encourage bank lending, 50 billion rand to top up social grants and 40 billion rand in unemployment benefits.  South Africa’s economy was in bad shape before the coronavirus crisis started. This year’s budget deficit is forecast to reach an 18-year high and loss-making state firms like South African Airways and power utility Eskom are a drain on the public purse. The Sun