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The Zambian Kwacha rebounded on Tuesday against the United States dollar in the spot market, according to Bloomberg data.
However, this rebound was likely to be short-lived given that the dollar remained broadly strong amid the Donald Trump trade and expectations that the Fed would proceed more gradually with rate cuts.
More localised factors such as the ongoing drought would also continue to apply pressure to the local currency as the import bill rises and foreign reserves are depleted.
Absa bank Zambia, on the other hand, reported that the Kwacha gained in Tuesday’s market session owing to an uptick in greenback supply by large corporates against prevailing demand.
“At 08:30am, the ZMW was quoted at K27.550/27.600 on the bid-offer and proceeded to close market on the same levels. The short term is expected to see the currency pair trade steady subject to forces of supply and demand,” according to the Bank in its daily market update.
Elsewhere, South Africa’s rand slipped on Tuesday as Trump’s tariff threat on its neighbours and China weighed on emerging markets.
At 1508 GMT, the rand traded at 18.20 against the dollar, about 0.8 percent weaker than its previous close.
On Monday, Trump pledged to impose big tariffs on the United States’ three largest trading partners – Canada, Mexico and China – detailing how he would implement campaign promises that could trigger trade wars. Commodity-linked currencies including the rand took a hit following the announcement due to their close ties to China.
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