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Central bank defends Kwacha, offloads $8.5m to support foreign exchange market


The Bank of Zambia (BoZ) on Friday, last week, offloaded US$8.5 million on the foreign exchange market to partially offset increasing demand for the greenback.

Steady trading with potential gains was, therefore, anticipated for the local currency in the near term.

According to Access Bank in its daily market update, the Zambian Kwacha was in the green against the United States (US) dollar in Friday’s trading session.

“On the market average interbank bid and offer, the USD/ZMW opened at K24.7017/24.7517 and closed at K24.6783/24.7283, respectively.

“The Central Bank offloaded 8.5 million US dollars onto the market to partially offset increasing demand for the greenback,” the report showed.

Read more: Kwacha faces pressure against US dollar, minor losses anticipated

Absa Bank, also in its report, showed that the Zambian currency traded favourably to the US dollar on Friday, supported by tax conversions and continued central bank presence in the market.

However, it indicated, the local unit showed weakness on a close day basis after closing at K24.500/24.550 on Thursday.

“Market opened with the ZMW quoted at K24.650/24/700 where it traded for majority of the session before handing in a five ngwee up tick to trade and close for the day at K24.600/24.650 on the bid and offer, respectively.

“Near term, the Kwacha is expected to trade under pressure owing to a steady rise in US dollar demand from large corporates and merchandise importers,” the report showed.

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