Local Money Market Rates

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The Kwacha continued on a downward trend on Thursday mimicking further falls in the euro-dollar currency pair, Zanaco Bank reported this morning.

According to Zanaco, the local currency extended losses in early trade as it opened at K5035-5055 against a close of K5005-5025 on Wednesday.

“The Kwacha succumbed to pressure from a stronger dollar bolstered by safe-haven buying on worries over the precarious health of the global economy whilst falling copper prices also weighed on the Zambian currency,” Zanaco stated. “The Kwacha briefly touched a low of K5045-5065 before paring losses to trade around K5025-5045 where it also closed. It was down K20 on the day.”

The local bank predicts that in the near term the Kwacha was expected to take cues from global market developments as well as the presentation of the national budget.

Zanaco also reports that the overnight interbank rate continued to decline on Thursday, touching 6.46 percent from the previous day’s 7.22 percent whilst the volume of funds traded on interbank slightly increased to K112.0 billion, up by K2.5 billion.

Money market liquidity is reported to have gone down to K621.1billion from K651.5 billion on Thursday.

The weekly government treasury bills tender was oversubscribed, receiving bids amounting to K493.8 billion against K250.0 billion on offer.

“K225.8 billion was allocated with yield rates declining on all tenors, the 91 days treasury bills yield rate dropped to 7.36 percent from the last tender’s 8.89 percent while the

364 days dropped to 12.80 percent from 13.49 percent,” Zanaco stated.

International Currencies

Sterling: LONDON, Nov 10 (Reuters) – Sterling edged lower against the dollar and underperformed the euro as worries about the euro zone drove investors to shed exposure to riskier currencies, offsetting any relief seen after the Bank of England kept asset purchases on hold.

Against the dollar, sterling was 0.1 percent lower at $1.5902, easing from highs above $1.5950 struck after the Bank of England announced its policy decision.

Euro: NEW YORK (Reuters) – The euro bounced from a one-month low versus the dollar on Thursday as easing concerns about Italy’s government helped steady the country’s bond yields, lowering fears about a financial bailout.

The euro last traded up 0.3 percent at $1.3586, having earlier hit asession high of $1.3652, according to Reuter’s data.

Rand: JOHANNESBURG (Reuters) – South Africa’s rand gained against the dollar on Thursday after the central bank said the inflation outlook had deteriorated, diminishing some market players’ hopes there could be another rate cut to support a weak recovery.

The rand was trading at 7.94 to the dollar at 1612 GMT, from Wednesday’s New York close of 8.05.

International Metals

Gold: LONDON (Reuters) – Gold trimmed losses on Thursday on a weaker dollar and as hopes that Italy will soon form a new government to carry out reforms and tackle the deepening debt crisis gave investors a little more confidence to bet on commodities.

Spot gold hit a daily low at $1,753.39 before paring some losses to trade at $1,765.09 an ounce by 10:58 GMT, 0.25 percent down from $1,769.54 late in New York.

Oil: NEW YORK Nov 10 (Reuters) – Brent crude futures rose on Thursday on supportive economic data from the United States and as investors perceived some progress in the efforts to keep Italy’s debt problems from spreading.

ICE Brent December crude rose $1.40, or 1.25 percent, to settle at $113.71 a barrel, having traded from $111.30 to $114.13.

Copper: NEW YORK/LONDON, Nov 10 (Reuters) – Copper extended losses into a fifth day on Thursday, setting itself up for its biggest weekly loss in seven weeks, as demand prospects dimmed from the deepening debt crisis in Europe.

London Metal Exchange (LME) three-month benchmark copper fell to an intraday low of $7,357 per tonne, its lowest since Oct. 24, before its last bid at $7,475, down from Wednesday’s $7,621 close

18 COMMENTS

  1. vote

    #1-2 if you don’t understand financial matters go play on brainless threads like DOnch Kubeba. We are talking about money here and the slide has nothing to do with whether the president is seen in public or not. In fact I spoke to the president today and he will be busy with his usual swearing in ceremony and you can watch TV and you will see how great he looks.

    Lets stop this unnecessary rumour mill running . As I have said before there are a lot of ammunition to attack this presidency with, and NOT his health please? Be Zambian.

    Back to the story , real direction of the Kwacha will be determined by today’s budget. Lets wait and see.

    • vote

      i noticed this soft spot towards Sata, you really need to change your name from chief bootlicker!
      kindly defect or go into retirement if relegating is not the best option…otherwise you are a sata lover

    • vote

      ANY GO HEAD AND DEFEND YOU PRESIDENT. BESIDES WE VOTED FOR HIM TO BE SWEARING AND FIRING PEOPLE, HOPING THAT WILL IMPROVE THE ECONOMY AND PUT FOOD ON PEOPLES TABLES, LETS BE REAL TELL THE PEOPLE TRUTH, WHERE IS THE PRESIDENT.

  2. vote

    #3 is not partisan though he is MMD.. He loves Zambia he contribute with reasoning. However, the truth is Zambia kwacha will drop very shapely after the budget.. A lot small chinese business have closed and went back home. in Copperbelt unemployement has risen sharpely.. Money chinese are reported to be going home next year.. So let brace ourselves for hanger and more Job losses.. The country is in a mess .. Has anyone observed what is happening in big supermarkets??? If you know economics and very observant you should noticed.. I won’t coment now.. Just Wait…. presido id not well. lets pray for him

  3. vote

    Good report. Everything is up in the air at the moment coz of Europe and the slowing global economy. The same is weighing down copper prices.

    Let’s wait to see the impact the budget will have on ZMK.

    Hey, #3 Bootlicker, good points.

  4. vote

    No.5, I beg to differ with your point. Commodity markets are driven by information and i believe the budget is one such source of information. Depending on issues dissussed in the budget and what direction, things may improve in the short term. I expect the local currency to go down further in the medium term as we approach christmas when the Kwacha is usually kept under pressure. We shud be able to normalise after the first quarter of 2012.

  5. vote

    #5 Mwa. Please tell us more. Why are the small Chinese businesses closing and going back home? Has the environment become unfavourable for them to do business?

    Also, if you dont mind, please tell us more about the supermarkets. Thank you.

  6. vote

    #7 Objective. yes I have also noticed that ZMK is under pressure in December. I wonder why. Can’t be Christmas shopping, can it?

    Which months do our dear foreign investors tend to buy a lot of ZMK to honour their tax commitments to GRZ?

  7. vote

    #3.ANY GO HEAD AND DEFEND YOU PRESIDENT. BESIDES WE VOTED FOR HIM TO BE SWEARING AND FIRING PEOPLE, HOPING THAT WILL IMPROVE THE ECONOMY AND PUT FOOD ON PEOPLES TABLES, LETS BE REAL TELL THE PEOPLE TRUTH, THE PF HAVE NO CAPACITY TO RESTORE THE REAL VALUE OF MONEY, GO AND LOOK AT RISE AND FALL OF THE POPULIST GOVERNMENTS,

  8. vote

    Whatever case, i would be happy if at all the use of k20 NOTES is introduced coz am even seeing the use of k50 and k100 kwacha notes phasing slowly.

  9. vote

    Good story LT we need more of such articles. The kwacha will soon be better with the budget out. Mineral royalties up from 3% to 6% on base metals such as copper. It means mines will convert more USD to meet their ZMK obligations. Increase in miners salaries will also improve USD flows. Donor inflows also a lot is still outstanding up to Dec 2011 and in 2012. Be patient guys the overall outlook is positive

  10. vote

    Good story LT we need more of such articles. The kwacha will soon be better with the budget out. Mineral royalties up from 3% to 6% on base metals such as copper. It means mines will convert more USD to meet their ZMK obligations. Increase in miners salaries will also improve USD flows. Donor inflows also a lot is still outstanding up to Dec 2011 and in 2012. Be patient guys the overall outlook is positive.

  11. vote

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