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BUUMBA CHIMBULU writes
THE Zambian Kwacha is expected to get some support as the market goes deep into the week predominantly on the back of corporates seeking local currency to settle Value Added Tax (VAT) obligations.
This is after the local unit slid further against the dollar on Friday due to an increase in dollar appetite from corporate importers as well as the agriculture and energy sectors.
Buyers of dollars dominated the trading session with the local unit gradually losing ground throughout the day to close at 18.400/18.450, eight ngwee lower than its opening levels, says Absa Bank Zambia daily market report.
At 08:30 hours, Absa said, commercial banks quoted the Kwacha at 18.320/18.370 per dollar, relatively unchanged from Thursday’s close.
“We might see the Kwacha get some support as we go deep into the week predominantly on the back of corporates seeking local currency to settle VAT obligations,” Absa said.
Cavmont Bank Zambia indicated that corporate activity was still largely mute as traded cautiously.
According to the Bank, the Kwacha made a further downward movement against the dollar on Friday as supply waned further from sellers.
“The local unit began the day trading at K18.350 / K18.400 but was seen trading at K18.450 / K18.500 by noon, with most interbank players seen protecting their offer side.
“The Kwacha is now trading above its 200day moving average of US$1/K18.2718,” Cavmont Bank said.
Elsewhere, South Africa’s rand fell on Friday as the dollar regained momentum and the country’s stock market corrected by over a percent, dragged down by bourse heavyweight Naspers Ltd.
The rand was 0.89 percent weaker at 17.5775 per dollar as the dollar rebounded from a two-year low as President Donald Trump’s decision to ban United States transactions with two popular Chinese apps reduced risk appetite.
The rand also suffered from worsening sentiment towards emerging markets, led by weakness in Turkey’s currency, which hit a record low in a new phase of high volatility trading.
