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The Zambian kwacha has remained under pressure against the US dollar, extending its losses for a second consecutive session amid sustained foreign currency demand and limited supply.
According to Bloomberg data, the local unit depreciated by just over 1.0 percent on Tuesday, closing marginally below K23.4000.
The depreciation was attributed to insufficient hard currency inflows to meet persistent demand.
“With market dynamics largely unchanged and the absence of notable foreign currency inflows, the kwacha may remain on the defensive,” Bloomberg reported.
Read more: Copper prices slip from three-month high, as Kwacha halts four-day winning streak against dollar
However, Absa Bank Zambia offered a contrasting view in its market commentary, noting that the kwacha showed brief bullish momentum during Monday’s trading session, supported by stronger supply inflows.
The USD/ZMW interbank market opened at K23.25/K23.30 before appreciating to K23.18/K23.235 by midday.
The local currency continued its upward movement to close at K23.15/K23.20 on the bid and offer, respectively.
“The coming days are likely to see the Zambian currency continue its bullish trend on the back of early salary conversions,” Absa stated.
On the international front, despite rising US Treasury yields, the US Dollar Index (DXY) remained under pressure, recording its fourth consecutive daily loss.
At the time of writing, the index was trading at 97.155, with analysts warning of a possible dip below the 97.00 threshold—potentially opening the door to retest recent lows around 96.377.
The dollar’s weakness reflects growing investor concerns over widening trade imbalances, inflationary risks from proposed tariff hikes, and political rhetoric targeting the independence of the Federal Reserve.
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