The local currency has made dramatic gains, appreciating from K14 to US$1 at the end of 2015 to K8.7 against US$1 yesterday.
The gains have been attributed to a myriad of economic measures Government and the private sector have implemented to stabilise the economy and reduce poverty.
A check at some banks at close of trading yesterday established that the Kwacha is trading under the K9 mark.
At Cavmont Bank, the Kwacha was selling and buying at K8.81 and K8.98; Stanbic Bank at K8.82 and K8.99; First National Bank at K8.78 and K8.96; and Ecobank at K8.80 and K8.97.
The Kwacha’s gains are attributed mainly to improved greenback supply from corporates and exporters paying various taxes.
On Tuesday, the Kwacha breached the K9.00 mark, the range in which it has been trading since the beginning of this year, and currently, the local currency is trading at an average of K8.80 per US dollar.
However, some bureaux in Lusaka and Kitwe are still trading at K9.00 and K9.10 for bid and offer, respectively.
Financial market analyst Maambo Hamaundu said in an interview yesterday that there are several taxes which are due in the month of July.
“Value added tax is due on July 16, pay as you earn on July 10, also quarterly tax obligations and provisional taxes coupled with Government securities auctioned last week,” Mr Hamaundu said.
He said if the current trend continues until it attains and sustains the K8 mark, it might help government to service the debts at a lower cost and boost imports.
“The current performance of the Kwacha can mainly be attributed to the improved foreign exchange on the market, but the question is, how will it be sustained because it is not every day that we have these taxes at the same time.
“The other question is that, do people have the Kwacha to exploit the opportunities arising from the appreciation of the local unit to import?” he asked.
The United Bank for Africa says the Kwacha opened yesterday’s trading in the range of K8.95 and K9.00 stronger than Tuesday’s close.
In its treasury newsletter, the bank says the local unit traded firmly against the dollar yesterday and is expected to remain strong.
“We expect the Kwacha to trade in the range K8.950 and K9.10 on the bid and offer respectively,” the newsletter reads in part.
First National Bank also says the Kwacha has been trading steadily against the dollar, with firm offers ranging from K9.00 and K9.05 since the beginning of the week.
“With purchases already going through below K9.00, a break will only be confirmed once offers dip below the mark. After close to two years, we may see consolidation below K9.00. Dollar supply over the last months is still providing good support for the local unit. Initial support is seen at K8.95,” the bank stated.