The Kwacha strengthens to below K9 per US dollar

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New Kwacha NotesTHE Kwacha, which has breached the K9 mark, has continued to appreciate against the US dollar and other convertible currencies with analysts projecting that it will remain strong.

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.

14 COMMENTS

  1. That’s how you do it baby, take HH to Mukobeko and keep him there for years and the Kwacha could easily hit K5. Since the sorted this chap, the economy has been on an upward trajectory. Mealie meal prices going down, maize surprises going up, inflation going down. currency strength going up

    What more can you ask for, HH in Mukobeko till 2021 baba

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    • @ PF Cadre, If only you knew that this gain as nothing to do with the economic performance of Zambia but its due to the fact people buying power has gone down, because people have no money so they are not buying a lot of imported good, So the importers are not importing hence there is not demand for the $, I can see you are PF because you have shown your s.tupidity just like another PF and your leader EL.

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    • @umuntu so even the bumper harvest is due to less buying power? Looking at your past predictions, you never expected the kwacha to improve under any condition under the PF government. To you even this “less buying power ” was not going to affect the kwacha favorably.

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  2. So the so-called “Dictatorship” must be a good thing then? if it leads to the strengthening of our currency then it’s a good thing because it’s also an indication of investor confidence in the economy. Unless this is fake news in UPND’s eyes.

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    • Oh…and not forgetting NUMSA who are attempting to liberate ‘UPND’ from the imaginary tyrannical regime in Zambia.(fiola)

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    • That’s how Kagame and M7 have improved their countries economies. ..they don’t brook any nonsense. Mugabe would not where he’s if he hadn’t interfered with the holy grail (the white man ). These guys should not be let loose.

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  3. Well done boys! Good news amid all this hatred from “others” including metal fabricators from SA.

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  4. Great news. Lets just pray that its not the case of the proverbial “the higher you climb, the harder you fall.”

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  5. Currency appreciation is a good indicator of a sound economy. Mutati is at the center of all this. He’s doing a good job.

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  6. 1.1, if Zambians are no longer buying imported goods that can only be good. Havent we been fighting the bad habit of “import crazy” since independence? If we have controlled that foo.lish appetite, great! Then let underfive stay away for a few years until we finish the job!

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  7. This is just a short term bump, you are already opening champagne. P-F vuvuzelas are so desperate for any goods news . For example, the United Bank for Africa says the Kwacha opened yesterday’s trading in the range of K8.95 and K9.00 stronger. This is gain of (9.00-8.95) of K0.05 ngwee. Please give us break. There is nothing fundamentally going on in the economy to change things significantly, in the short-term and long-term, because P-F is policy bankrupt.

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  8. 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.

    This analyst is another P-F liar desperate for good news as usual. How can tax received in kwacha boot the exchange rate. I thought the exchange rate is boosted by exports and other receipts in foreign currency.

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