Kwacha To Fall Further – FNB

FNB-Zambia says it sees the kwacha coming under pressure and any further fall of the local currency will only be stemmed by intervention from Bank of Zambia.
Last week saw the kwacha come off its all-time low of above K10.20 against the dollar.

The kwacha had hit its all-time worst on a cocktail of factors such as the strengthening US currency and concerns about the impact of waning Chinese growth, which heightened speculative behaviour on the local currency as key players projected the worst for the embattled local currency.

However, last week, the local currency flimsily retreated from its free-fall after State House directed Bank of Zambia and Ministry of Finance to inject US$120 million into the economy to help the domestic currency that has depreciated by as much as 35 per cent this year.

The relief from the US$120 million was immediate but could not hold.
In its daily newsletter, FNB – Zambia stated that for a few days [preceding this week], it looked like nervousness in the market had eased but Tuesday saw a turn of events after what looked like small demand for the greenback went through the market.

Last Tuesday, the kwacha, according to FNB-Zambia, opened fairly weak at K9.875 against US$1 before weakening further to close the day at K9.95 against the dollar.
But as at Wednesday morning, on interbank rate, the kwacha was quoted trading in the range of K9.87 and K10.06 for bid and offer against the US dollar, with FNB – Zambia projecting the local currency to weaken further in the absence of the intervention from BoZ.

“Our bias remains towards kwacha weakness as business entities continue to convert kwacha to US dollar,” stated FNB-Zambia. “The moves upward remain purely speculative at the moment. It will be difficult to curb kwacha weakness unless we see increased intervention by the central bank.”

According to market sources, the kwacha was particularly coming under pressure from Mopani Copper Mines’ announcement of the biggest job cut while current depressed economic environment in China is helping to sustain panic behaviour by local market.

A number of mining companies are currently in the process of cutting down jobs as their viability is hurt by shortage of electricity, depressed international copper prices, government’s failure to refund them over US$600 million in VAT refunds and concerns of clarity of the mining fiscal regime.

“As it is now, very few mining companies are exporting what they have mined,” an industry source said anonymously. “Most of them are just keeping the concentrates hoping it [fiscal regime] will get clearer this year going forward. And I am sure you know what this entails for the kwacha.”

Copper exports account for about 68 per cent of Zambia’s foreign exchange earnings.
– See more at: http://www.postzambia.com/news.php?id=11472#sthash.wEAAuhl3.dpuf

Posted by Editor on September 18, 2015. Filed under LATEST NEWS. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

24 Responses to Kwacha To Fall Further – FNB

pillar

September 18, 2015 at 11:43 am

Upnd caders not watching tha address by tha president but will only wait 4 the post and zwd to point tha negatives then they will blow tha vuvuzelas in this group talkin about vision and blah blah
Judge Joe Bidden

September 18, 2015 at 11:53 am

When we say the worst is still coming you think we are joking, just wait. K10.20 against the dollar thats nothing. Didnt FNB forward this data to Edgar? Like he cares….
- Objective Prophetic Philosopher
  
  September 18, 2015 at 1:10 pm
  
  *****TRUTH & REALITY v/s MYOPIC & ARROGANCE*****
  
  You can’t fight the truth and reality with myopic thinking and arrogance. I think the eminent miracle in this phase is that the blind are beginning to see and nodding to the truth and reality at hand. You want a simple example??????…………… Baby Vaseline was at ZMW23.00 three days ago………… it’s now at ZMW50.00 ( I had to see to confirm )
  
  Is the above booklet by our president offering urgent assiduous answers to this matter???? Aaauch!!!!!
  - Objective Prophetic Philosopher
    
    September 18, 2015 at 1:44 pm
    
    Meant “the president’s speech” in parliament.
Xenophobia

September 18, 2015 at 12:30 pm

I remember in 2005 using a rate of K2,950 (rebased K2.95) for $1. I even paid my ACCA exam fee @ K5,900 (rebased K5.90) for GBP 1.
- kabaso
  
  September 18, 2015 at 2:50 pm
  
  The biggest problem that we have in Zambia or Africa in general is that we are lazy, we do very little but we always want to live like kings. the day copper will finish that’s the day everybody will die. The world would not have been developed if a white man has been as lazy as we are. its fact period.
harishon

September 18, 2015 at 12:36 pm

With or without ecl, the Kwacha/dollar will always be ascending & the worst will be there to fulfill the scriptures.
chuundu chaitwa(cc)

September 18, 2015 at 12:42 pm

@harishon you are the people we need in society because the truth is with you the bible says it all. but Earthiest and satanists like NEZ AND HH respectively will argue
Onyx power @vampiros

September 18, 2015 at 12:50 pm

With the latest increase in copper prices due to mine closures in Chile kwacha is expected to gain significantly because our export are likely to increase once again
Big Nose

September 18, 2015 at 3:15 pm

Ba ECL form more ministries with this economy sure .soon the kwacha will be k30per dor .with ba ECL in office ,its true this man no vision .solution remove him from office together with his team 2016before Zambia becomes a desert .Twanaka listening to empty ad useless address on top given huge allowses .failure party all u is corruption .
Chama Chishimba

September 18, 2015 at 4:43 pm

Ati China ewatwipaya but when china was doing fine our economy was poor.
Dull Zambians.
The New Deal govt performed better. It is right people who can perform. Failure to perform by ba pf will always attract people’s attention. Why failing when the condemned mmd did better?
Hope 2016 will bring high hopes (hh).
Chama Chishimba

September 18, 2015 at 5:01 pm

Tired of supporting poor finishers.
Let others better than us take over.
After all we are all benefisheries. We’ll go the Munkombwe style.
But kwacha still okay. For us with a few dollars hope to have it at K100.00.
Suggested solution: at K10.00 rebase the kwacha. Remove two zero and increase salaries for workers. Everybody will want to have kwachas than dollars.
This is one way to reduce pressure on the forex exchange market.
People have failed why not chip in with new desparate ideas? Remember a drowning man will…
one d

September 18, 2015 at 5:50 pm

Kabaso and Harrison I couldn’t agree more. you are very right guys.
Ndanje kakhs

September 18, 2015 at 5:58 pm

I can’t rule out HH as one of the force put pressure on the kwacha. I miss KAUNDA
He could have stopped the importation Of rubbish such as salaula spacios
Good guy but lethal 4th Dan

September 18, 2015 at 6:16 pm

Hallo Ba Zd am back
ken

September 18, 2015 at 8:11 pm

SA banks creating anxiety over the Kwacha. They should stop. Stanbic and FNB have been sponsored to create anxiety and pressure on the currencies in Southern Africa.
New Educated Zambia©❤√

September 18, 2015 at 9:41 pm

Need I say more. Things are bad. Only a fool like mj banda sees prosperity where there is poverty. Vote upnd
BC The Governor

September 19, 2015 at 8:21 am

Some people comment without thinking, what will kill most Zambians is laziness
. not everything that happens has the president to blame. its not the change of the president that will bring ultimate change in the economic crisis, but prayer and trust in God. hard work and responsibility.
- Ndanje kakhs
  
  September 19, 2015 at 10:46 am
  
  Correct. Myself I supplement my salary with farming to an extent that some lazy people think that I have magic that brings me money! It’s just sheer hard work that make me look prosperous
Kabwe Peter

September 19, 2015 at 12:13 pm
club zero

September 19, 2015 at 12:14 pm

@NEZ nama GUYZ mu UPND ati shani,I was out.ok things are bad and we need someone who can help us.VOTE UPND ifintu fya lula
kayula

September 19, 2015 at 12:17 pm

let it fall to any level you might think of God will see us through.
Non - Partisan

September 19, 2015 at 1:29 pm

ladies+gents,its true the fall of the kwacha is due to external factors(low copper price,low china copper demand,stronger benjamin…etc) BUT believe you me the rate has been worsened by the current regime’s poor policies.even in a home you have to plan before u get that loan from the bank and borrowing for consumption is dangerous.Economists and serious business people only advise “borrowing for investment”.
honestly lets brace ourselves for harder times ahead…coz even if or when we change govt,believe you me,the next leader shall have one big huge task to bring things to normal….the damage is just way too big to be repaired in a few years.
Non - Partisan

September 19, 2015 at 1:37 pm

I personally think in zambia we need to be changing govts every 5 years…and make sure whoever dipped his hands in state coffers is seriosly pursued and respective laws + judgements applied.that way they will be more responsible+they will be having 2nd thoughts before thieving or misapplying public funds .they will even be performing more+better in an effort to impress the voter.learned guys out there,please correct me if am wrong,isnt this what is called “negative motivation” or is it “reverse motivation”???am not sure,ifisungu fyenu ifi fyalishupa !