Zanaco Bank says the rebased Kwacha is expected to continue trading under pressure in the near term against the dollar.
In its daily treasury newsletter for 16th May, 2013, Zanaco says the local unit should continue trading range bound with support and resistance at KR5.300 (K5,300) and KR5.400 (K5,400) for bid and offer respectively.
The bank says the Kwacha was still on the back foot against the Dollar on Wednesday, losing KR0.01 (K10) on the day.
“The local unit opened flat from the previous day’s (Tuesday’s) close of KR5.330 and KR5.350 on bid and offer respectively.
The treasury newsletter explained that healthy inflows from corporates boosted the rebased Kwacha but the gains were short-lived as demand seemingly out-weighed the supply.
The domestic currency retraced its gains to close the trading day at KR5.340 (K5,340) and KR5.360 (K5,360) for bid and offer respectively.
And Standard Chartered Bank says the interbank yesterday was quiet and only saw some aggressive buying interest from energy, manufacturing and the Small and Medium Enterprises (SMEs) sector closing at KR5.330 (KR5,330) and KR5.370 (K5,370) for buying and selling.
This is contained in its daily brief for May 16, 2013 made available to ZANIS in Lusaka today.
Meanwhile, the Sterling rose 0.3 per cent against the Dollar to hit $1.5272 after the forecasts but was later flat on the day.
The Bank of England lifted a bit of the gloom hanging over the economy on Wednesday, issuing a slightly improved outlook for inflation and growth for the first time since the financial crisis.
The euro skidded to a six-week low versus the dollar on Wednesday as data showing an unexpectedly large contraction of the Euro Zone economy bolstered the case for more monetary easing by the European Central Bank.
The Euro fell as low as $1.2842, its lowest since April 4, and last traded down 0.3 per cent against the Dollar at $1.2878.
South Africa’s Rand fell to a near two-month low against the Dollar on Wednesday as a wildcat strike at platinum producer Lonmin entered its second day.
The Rand was at 9.2865 to the Dollar at 1455 GMT, down 0.6 per cent from its close in New York on Tuesday. It reached a low of 9.3255 earlier in the session, its weakest since March 25.
And copper went into negative territory after data showed Germany’s economy managed a surprisingly weak growth in the first quarter of the year, after a sharp contraction at the end of 2012, while France slipped into recession.
Three-month copper on the London Metal Exchange ended at $7,198 a tonne, down from Tuesday’s close of $7,245, having earlier hit its lowest since May 3 at $7,101.
Gold fell for a fifth straight session for its longest daily losing streak since January 2011, sliding below $1,400 an ounce, losing 2 per cent, and hit its lowest in nearly a month as the record rally in U.S. equities and economic optimism undermined the safe-haven appeal in Bullion.
Spot gold dropped as much as 2.5 per cent to $1,390.24, its lowest since April 19. It was down 2 per cent at around $1,391 an ounce.
Brent crude oil closed up for the first time in four sessions on Wednesday, spurred by a rally in U.S. stocks, but copper and gold extended their losses as the Dollar’s strength continued to weigh on various commodities priced in the currency.
The benchmark Brent crude oil out of Europe’s North Sea closed up $1.08 at $103.68 a barrel after falling to $101.20 earlier in the day.
In other related news, government has postponed the implementation of the SI 32 to come into effect on 1st July under new SI-35.
The Government has rescheduled the effective implementation date of SI 32 of 2013 from Thursday 16th May, 2013 to Monday 1st July 2013.
The amended implementation date is contained in Statutory Instrument Number 35 of 2013, which was gazetted yesterday.
On the 29th April 2013, Government issued the Bank of Zambia (Monitoring of Balance of Payments) Regulations, 2013, Statutory Instrument Number 32 whose effective date was 16th May 2013.
Statutory Instrument Number 32 of 2013 will now be read together with Statutory Instrument Number 35 of 2013.
FAILED economic policies. Removing zeros does not fix the economy. LESSON!
Neither here nor there. Rebased kwacha is more portable and easy to understand.
Thanks to the Bank of Zambia for the decision.
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