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Selling pressure on the kwacha persisted on Thursday, with the local currency extending losses for a ninth consecutive session against the United States (US) dollar.
According to Bloomberg data, the losses were modest at 0.12 percent.
The kwacha briefly traded above the K24.200 per dollar mark during intraday trade but failed to sustain the move, closing just below that level.
Market analysts attributed the continued weakness to persistent liquidity constraints and heightened corporate demand for dollars.
They cautioned that, unless there was a significant shift in the prevailing supply-demand dynamics, the weakening trend is likely to continue.
In its daily market update, Absa Bank Zambia reported that the local unit opened the session at K24.100/24.150 per US dollar on the interbank market and remained within that range until close.
Read more: Positive microeconomic trends, weakening US dollar boost Kwacha — Economist
“Local and offshore US dollar demand and supply, predominantly from corporate and retail segments, remains a key factor for the kwacha’s stabilization. In the short term, the currency is expected to stay under pressure amid prevailing supply-demand dynamics,” the bank noted.
On the international market, the US dollar eased slightly after recent gains, despite strong June jobs data.
Investors grew cautious ahead of President Donald Trump’s July 9 tariff deadline and uncertainties surrounding US fiscal policy following the House’s approval of a US$3.4 trillion tax and spending package.
Reports indicated that President Trump signalled his administration may soon begin issuing tariff notices to trading partners, a move that further unsettled markets.
Analysts believe that ongoing trade tensions and fiscal policy risks could limit the dollar’s upward momentum, with traders likely to sell into any rallies.
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