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In the near term, the Kwacha is expected to trade within a narrow range, with fluctuations largely driven by the supply and demand dynamics in the market.
On Tuesday, the Zambian kwacha experienced a mixed trading session, holding steady in the first half of the day, but later continued its bearish trend against the United States dollar and other major currencies.
By the close of the session, according to the Absa Bank Zambia daily market update, the exchange rate stood at K26.500/K26.550, indicating a slight depreciation of the kwacha.
“This was largely driven by a persistent low supply of U.S. dollars in the market. At the start of the trading session, the USD/ZMW interbank rate was quoted at K26.450/K26.500 on the bid and offer, respectively,” the updated indicated.
Meanwhile, the United States dollar index remained contained above the 106.00 level for the Tuesday session, gaining marginally as investors hunkered down ahead of today’s key US CPI data.
Some were expecting the Fed to be more cautious in its approach next week even though the market is pricing a 86 percent chance of a 25 basis point cut next week.
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