THE Zambian Kwacha and Nigerian naira maintained their trading range despite most currencies in the region depreciating against the United States (US) dollar as a result of mixed US jobs report, financial market players observe.
This is against Zambia’s major convertible currency, the South African rand which depreciated to 16.217 on Monday from 16.148 on Tuesday after the dollar firmed.
Other currencies that nose-dived were the Ghanaian cedi which posted 3.965 from 3.951, Ugandan shilling to 3,443 from 3,433 while the Namibian dollar and Swaziland lilageni to 16.25 from 16.15 respectively.
Cavmont Bank, in its market update says the Kwacha was largely unchanged at K11.28 and K11.30 for bid and offer respectively, against the US dollar which posted gains against other major currencies on Monday.
However, the Botswana pula appreciated to 11.31 from 11.4 and Kenyan shilling to 101.884 from 101.905.
Zanaco also notes that the Kwacha is expected to remain stable as it is anticipated to be capped between K11.30 and K11.40 in the short-term.
In its daily treasury newsletter, the bank notes that, “The Kwacha was unchanged on Monday and is expected to trade on a firmer footing in the upcoming days as companies convert the dollar to pay their mid-month taxes.”
On the local market, liquidity levels slightly increased yesterday from K630.61 million on Monday to K673.71 million.
However, the amount of funds traded by commercial banks reduced from K753.10 million to K614.50 million with the weighted average overnight interbank lending rate marginally posting an increase from 26.64 percent to 26.68 percent.
“In the short-term, the overnight interbank lending rate is expected to remain around the 26.6 percent mark given the liquidity levels and volume of traded funds,” the bank says.
Meanwhile, copper on the London Metal Exchange (LME) edged down on Monday after the dollar firmed following a mixed US jobs report, with the start of a week-long holiday in China draining liquidity from the market.
Three-month copper on the LME had slipped 0.5 percentage point to US$4,607 a tonne, extending 1.2 percent losses from the previous session.
On oil trend, crude prices fell on Monday because of lingering concerns over a supply overhang and after a Saudi-Venezuela meeting showed few signs that steps would be taken to boost prices.
Source: Zambia Daily Mail