Subdued dollar demand buoys Kwacha

BUUMBA CHIMBULU writes THE Zambian Kwacha traded on the front foot in Thursday’s trading session as it posted gains against the greenback, Absa Bank Zambia has said. The Bank highly attributed the appreciation of the Kwacha to month end conversions coupled with subdued dollar demand as companies settled their salary obligations. “At 08:30hrs, commercial banks […]

Subdued dollar demand buoys Kwacha
BUUMBA CHIMBULU writes THE Zambian Kwacha traded on the front foot in Thursday’s trading session as it posted gains against the greenback, Absa Bank Zambia has said. The Bank highly attributed the appreciation of the Kwacha to month end conversions coupled with subdued dollar demand as companies settled their salary obligations. “At 08:30hrs, commercial banks in Lusaka quoted the Kwacha at K18.650/18.700 per dollar, unmoved from its previous days close and it strengthened gradually throughout the day to close at K18.550/18.600 on the bid and offer respectively,” the Bank said in its daily market update. It further anticipated that the local currency would in the near term trade range bound with demand and supply driving the currency’s next move. Elsewhere, the South Africa’s rand weakened on Thursday as a global asset price rally evaporated, with investors bracing for more bad news after dismal economic releases around the world signaled coming pain for developed and emerging economies. The rand was 2.1 percent weaker at 18.5280 per dollar, rolling back from a 2-week best of 18.0200. Meanwhile, Absa Bank Zambia indicated that copper eased on Thursday as a private sector survey showed factory activity in top consumer China unexpectedly shrank. The Bank however said hopes for higher metals demand as the world’s second largest economy reboots curbed price falls. “Lingering fears for a long recovery ahead for China pulled benchmark copper on the London Metal Exchange (LME) down 1.3 percent to US$5,196 per tonne,” Absa said. The Bank also said oil prices fell on Monday, paring last week’s gains, on worries a global oil glut may persist amid slumping demand and United States-China trade tensions that could restrict an economic recovery even as coronavirus pandemic lockdowns start to ease. Brent crude futures were down 24 cents, or 0.9 percent, at US$26.20, after touching a low of $25.50. Brent rose about 23 percent last week following three consecutive weeks of losses. The Sun