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Copper prices surged to a five-month high on Monday, buoyed by China’s new economic stimulus plan and a weakening United States (US) dollar.
Benchmark three-month copper on the London Metal Exchange rose to nearly US$9,870 per metric tonne, while U.S. Comex copper futures gained 1.5 percent to US$4.96 per pound, according to a report by Access Bank Group.
China’s “special action plan” aims to boost domestic consumption, with recent data showing stronger-than-expected growth in consumption, investment, and industrial production.
However, the property sector remained weak, with home prices continuing to decline.
Locally, the Zambian Kwacha weakened further, closing above the K28.6500 per dollar mark as foreign currency liquidity challenges persisted, according to Bloomberg data.
Read more: ZANACO optimistic about Zambia’s copper production target, invests to support growth, says Saasa
Dollar demand continued to outpace supply, contributing to the local currency’s decline.
Absa Bank Zambia noted that Friday’s trading session saw the Kwacha lose 2.5 ngwee to trade at K28.575/28.625 on the bid and offer, respectively.
The bank warned of continued demand-side pressure on the Kwacha in the near term.
“Friday’s market session saw the Zambian kwacha edge lower with activity generally subdued. The near term is likely to have the local currency experience demand-side pressure subject to market forces,” Absa stated.
The combination of rising copper prices and a weakening Kwacha underscored the complex dynamics shaping Zambia’s economy, with potential implications for trade and investment.
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