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The Zambian Kwacha extended its bullish momentum for a seventh consecutive session on Friday, buoyed by sustained foreign currency inflows amid a softening U.S. dollar, which saw the dollar index retreat from weekly highs.
The local unit appreciated by 0.61 percent against the U.S. dollar, closing just below the K26.600 mark, marking its third straight weekly gain—the strongest performance so far this year.
According to market analysts at Access Bank, the Kwacha’s recent rally has been driven by an improved supply of foreign exchange, although a slight depreciation is anticipated in the coming week as demand for hard currency resurfaces.
“Dollar buyers largely stayed out of the market last week, anticipating more favourable exchange rates. This week, demand is expected to return and may put pressure on the kwacha,” the bank noted in its daily commentary.
Read more: Kwacha strengthens further against dollar as foreign exchange inflows remain steady
Absa Bank Zambia, in its own market update, confirmed the local unit’s continued strength, stating that market direction remains highly sensitive to fluctuations in foreign exchange supply and import-related demand.
“The kwacha opened Friday’s trading at K26.4000/26.5500 and strengthened steadily, closing at K26.2750/26.3250. We expect the pair to trade within a relatively stable range in the near term,” Absa said.
Globally, the dollar index edged lower on Friday, reversing some of its weekly gains as optimism faded over a potential U.S.-UK trade agreement. Market sentiment also remained cautious ahead of renewed U.S.-China trade talks.
U.S. President Donald Trump floated the idea of an 80 percent tariff on Chinese goods, calling on Beijing to open up its markets. However, White House Press Secretary Karoline Leavitt clarified that the U.S. would not reduce tariffs unilaterally.
In response, China’s central bank announced measures to enhance financial support for domestic consumption and foreign trade, signalling renewed efforts to buffer the economy from the impact of the ongoing trade war.
Meanwhile, U.S. Federal Reserve officials maintained a cautious tone following Wednesday’s policy meeting, citing lingering economic uncertainties that continue to weigh on the outlook for interest rates.
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