Kwacha Hits K11

THE kwacha closed last week trading at K11 against the US dollar, its weakest since last March when it appreciated from K11.50.

And financial market analyst Maambo Hamaundu says the local market continues to face low supply of foreign exchange but demand continues to remain substantially high.

According to the market experts, the kwacha lost by one per cent against the dollar on Friday, reflecting a persistently thin dollar supply onto the market.

“There is nothing sinister about today’s [Friday] kwacha fall; one per cent might sound a big fall, especially after the stability we have seen in the last few weeks but this is a reflection of the thin dollar supply we have been experiencing,” a market expert who spoke on condition of anonymity said.

“The stability we have experienced and the signs of the slight appreciations have been due to demand side management where the Bank of Zambia has made the kwacha very expensive to get and therefore reduce on demand for the dollar…but over and above, there hasn’t been any improved dollar inflows over this period, and that is a point you have to fully appreciate.”

The market expert said over the last few weeks, the local currency had eased its reactions to the major sentiments in the global economy.

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