Kwacha firms up

THE Zambian Kwacha was a touch stronger against the dollar, supported by subdued demand and increased dollar inflows from corporates finalising on their local currency month end obligations.

Barclays Bank Zambia daily market update indicated that the performance of the local currency was also due to tight liquidity in the money market.

At 08:30 hours, Barclays said, commercial banks quoted the Kwacha at K12.850/12.900 to the dollar, unchanged from its previous close.

“Demand and supply was almost evenly matched on the day with the Kwacha closing at K12.825/12.875 on the bid and offer respectively.

“With the country’s credit rating lowered to junk status by Fitch rating agency, the local unit is likely to be on the defensive in the near term,” Barclays Bank said.

Elsewhere, the South Africa’s rand retreated, pausing after a two day advance as investors took profits and looked ahead to the G20 summit where the United States and China are set to agree a truce in their tariff war.

The rand as at 0650 Greenwich Meantime was 0.1 percent weaker at 14.2300 per dollar, easing slightly from its overnight close of 14.2250.

On the money market, the liquidity levels decreased on Thursday to close at 529.13 million from K735.60 million with the volumes of funds traded increasing marginally to K173.00 million from K130 million seen on Wednesday.

The cost of borrowing funds on the interbank was unmoved at 10.34 percent while the local market remained subdued on Thursday in a quiet trading session.