Liquidity level shrinks, as Kwacha depreciates further

Liquidity levels in the Zambian economy dropped to K1.648 billion on Tuesday, December 13, 2022, as the Kwacha continues to lose ground.

“The liquidity levels in the market dropped from K3, 437.64 million to K1, 648.15 million seen the previous day,” Absa Bank market update stated.

It indicated that the volumes of funds traded on the interbank in Tuesday’s session increased from K580.00 million to K710.00 million, with the weighted overnight interbank rate marginally increasing from 8.81 percent to 8.99 percent.

Meanwhile, Zambian Kwacha lost ground on Tuesday’s trading session against the United States (US) dollar due to increased appetite for the greenback from importers across different segments.

At 12:20 PM Central African Time, the Kwacha was quoted at K17.3673/17.7003.

According to Absa Bank Zambia market update, the inflows remained inadequate to fill the heavy demand experienced on the market.

Opening the day at K17.400/17.450 on December 13, 2022, the local unit weakened gradually hitting levels of K17.425/17.475 by mid-day and finally closing at K17.450/17.500 on the bid and offer respectively.

In the near term, the local unit was expected to maintain its bearish stance as demand continues to outweigh supply.

Read more: Zambian Kwacha continues poor run against the dollar, trades K17.79