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The Zambian Kwacha strengthened against major international currencies on Wednesday, buoyed by improved United States dollar liquidity and support from the central bank.
According to the latest market report from Absa Bank Zambia, the local currency posted significant gains during the trading session as increased greenback supply boosted market confidence.
The trading day opened at K17.750/K17.800 on the interbank market before the Kwacha appreciated sharply to K17.350/K17.400 around midday.
It later closed the session at K17.300/K17.350 against the US dollar, representing a net gain of 40 ngwee.
Absa Bank attributed the currency’s strong performance to increased dollar supply facilitated by central bank support, which helped ease demand pressures on the foreign exchange market.
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“Wednesday’s market session saw the Zambian Kwacha rally against major currencies resulting from increased greenback supply facilitated by central bank support,” the bank stated in its daily market update.
The bank noted that, in the short term, the local unit is expected to remain range-bound around current levels as market participants continue to monitor liquidity conditions and foreign exchange flows.
Market data also showed the Kwacha outperforming expectations, with the USD/ZMW currency pair closing lower on the day.
According to Bloomberg data, the pair fell by more than one percent to close below the K17.60 mark, reflecting renewed strength in the local currency amid favourable market conditions.
The appreciation comes as authorities continue efforts to stabilise the foreign exchange market and support macroeconomic fundamentals.
Analysts say sustained dollar inflows and improved market liquidity could help maintain stability in the exchange rate, although external factors such as global commodity prices and international market developments remain key determinants of future currency movements.
The Kwacha’s latest gains are expected to provide some relief to businesses and consumers by helping contain the cost of imported goods and easing inflationary pressures linked to exchange rate fluctuations.
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