TWO SUPPLY LEVERS HELPING TO BUFFER KWACHA’S PERFORMANCE!
THE Kwacha has made steady trading patterns owing to the mixture of varying compositions at play, one of which is the pleading investor’s confidence coupled with a strong market sentiment underplaying some critical roles in the forex market itself, but on the other hand we also have some steady supply channels from the exporters and corporate sellers doing some magical numbers at work.
The local currency has made and still making a boost following strong balance to cushion inflationary influencers through forex instability where the central bank has pumped in a $10 million to help cool demanding pressure on the supply side (and remember from September to December we have a heavy pick up on the US Dollar owing to the strong importer demand drive), a situation that is also coming with supply support from market players who are also making available hard currency in tax obligations.
In the short to medium term, we expect the Kwacha to perform moderately and will also be swinging just within the range bound between 15 and 19 Kwacha per unit of US Dollar. A trend that will hold strongly to have 2023 national budget functional and the current prevailing performances are strongly signaling positivism required to make a soft landing during the dry periods which is between December and March when seasonal demands pick-up of goods and services tend to take an upward trajectories.
So, in short the supply valves seen from market players and the Bank of Zambia (BOZ) vehicle currency support have vehemently made the market to stand a firm and collective boost, anchoring a very strong balanced trading scale and the US Dollar.