Kwacha fluctuation due to high demand of forex- Analyst
The continued fluctuation of the Kwacha against major convertible currencies is been influenced by the high demand for supply of forex, a Financial Analyst Maambo Hamaundu has observed.
And yesterday’s trading saw the Kwacha closing five points stronger on the inter-bank at KR 5.275 to KR 5.295.
According to the Standard Chartered bank daily financial briefs the market had a fair balance of the trade on the sell and buy sides with dollar-Kwacha trading range.
Mr. Hamaundu says there has been a mismatch between the supply and demand of the dollar in the past months.
He said despite the country having recorded impressive copper prices on the London Metal Exchange (LME), the local currency has not been performing well.
He explained that copper has an effect on the country due to its nature of been a major export product, therefore when they are high copper prices the Kwacha is also expected to appreciate.
Mr. Hamaundu stated that the current situation means that despite the country getting enough dollars from copper exports the demand always outstrip supply.
He has further appealed to government to find a lasting solution to the problem which can only be achieved through the creation of more manufacturing industries in the country hence minimizing the levels of imports which also contributes to high demand for the dollar.
The Kwacha has continued to fluctuate in its performance trading in the range of K5000 and K5300 to one United States dollar (US$).
However, prices of copper on the international market have since last year enjoyed a fair and according to LME by Monday 14th January 2013 the commodity had gained by 0.6 per cent to trade at US $8,089 per metric tonnes.