MONTH-END DEMAND TO BUOY KWACHA

BUUMBA CHIMBULU writes THE financial market expects money supply to pick up as companies prepare for month end obligation which should hold the Kwacha at the current levels18.50/18.55 of against the dollar. Rates on Friday last week moved from 18.50/18.55 to 18.65/18.70 levels on the bid and offer respectively driven by increased demand from various sectors, Absa Bank Zambia said. According to Absa Bank Zambia daily market report, the foreign exchange market was active in Friday’s trading session with circa US$7 million traded on the interbank.  “We saw the local unit post gains at the beginning of the week, however, most of those were lost by close of business on Friday.  “We expect supply to pick up as companies prepare for month end obligation which should hold the currency at the current levels,” said the Bank. Cavmont Bank Zambia indicated that the Kwacha in the interim was expected to remain unchanged from current trading levels with resistance being predictable at US$1/19.100. The Bank in its daily market update said Friday’s trading session saw the Kwacha continue its downward movement against the United States dollar as demand continued to outweigh supply.  It explained that the Kwacha’s performance to the downside had mainly been as a result of an increase in liquidity in the money markets which had seen an increase in demand. “The Kwacha touched an intra-day low of K18.665 / K18.715 from an opening level of K18.500 / K18.550.  “By noon, the currency pair was seen being quoted at K18.600 / K18.650, a level it maintained until close of business,” said the Bank. Meanwhile, copper prices in London on Monday rose to their highest in nearly six weeks as some major economies planned to re-open businesses after weeks of lockdown to contain the pandemic.  Benchmark three-month copper on the London Metal Exchange (LME) rose as much as 2.3 percent to US$5,260 a tonne, it’s highest since March 17, 2020. The most-traded June copper contract on the Shanghai Futures Exchange (ShFE) advanced as high as 2.6 per cent to 42,880 yuan (US$6,059.15) a tonne, a level unseen since April 17, 2020. The Sun