The copper price, which has remained strong on the global market, is expected to boost the Kwacha’s performance against the United States (US) dollar in the medium term, Cavmont Bank notes.
On Friday, copper, which is Zambia’s major export earner, witnessed a price fall of one percent on the London Metal Exchange (LME) but maintained its steadier trend trading at about US$5,855 a tonne.
In its market report, the bank says on Thursday, the Kwacha came under further pressure against the dollar to close at K9.57 and K9.62 after opening at K9.55 and K9.60.
“The recent performance in the local unit has mainly been as a result of inadequate supply from sellers which has been outweighed by demand from importers. However, copper prices have remained bullish and are expected to boost the Kwacha’s performance in the medium term,” the report reads.
Zanaco says the local currency market has seen a rebound in appetite for hard currency (greenback) from corporates amid a slowdown in foreign currency inflows.
The local unit is expected to trade between K9.55 and K9.65 in the near-term.
“The Kwacha remained relatively unchanged against the greenback during Thursday’s trading session that saw limited demand from both the local corporates and the interbank,” the bank says in its daily treasury newsletter.