Kwacha remains stable
By Business Reporter
THE Zambian Kwacha last week remained stable throughout the trading sessions as transactions simmered into the long weekend.
However, foreign exchange suppliers were active early in the week but resisted any purchase offers below the K4,720 level and forced rates in the K4,710 and K4,760 band for buying and selling rates respectively.
Finance Bank Zambia (FBZ) says that minimum volatility was witnessed early in the week as the dollar became bullish but stability was restored as suppliers surfaced virtually on the same day and converted over $2 million.
Their latest treasury market report states that buyers on the same hand resisted deals above K4,765 levels resulting in a stable Kwacha by close of business on Thursday.
Margins between the buying and selling rates kept shrinking and were currently operating at 0.5 per cent despite the authorised two per cent maximum spread.
And mid month wages for some under ground and casual mine workers could generate over $2.5 onto the market as respective firms seek or convert for the domestic currency.
The report states that this would stimulate the Kwacha further and likely to remain bullish within the K4,740 level by the end of the week.
On the market, the entire week was extremely liquid with aggregate surplus balances of commercial banks exceeding levels of K100 billion.
The financial report states that the few inter-bank transactions that took place were pegged at averages of 4 per cent.
The central bank’s Open Market Operations (OMO) window remained closed in line with government’s current strategy of increased money supply to boost the economy.
Meanwhile, Government was still adhering to its commitment made in this year’s Budget to stick to the projected net domestic borrowing of K950.4 billion and was offering a total of K50 billion on a weekly basis.
Public demand has in the meantime doubled with over 50 per cent bids rejected as rates continue to plummet.
