Foreign Exchange And Money Market Rates

The Kwacha was little changed against the U.S dollar on Thursday as the local unit opened at K5.335/5.375 per dollar, after having closed within the same range during the previous trading session. The has continued to remain weak together with other currencies of emerging markets following the appreciation the U.S dollar against major convertibles. As a result, market activity was rather flat especially from corporates while most interbank players were seen protecting their offer side. By noon, the Kwacha was still being quoted at K5.335/5.375 per dollar during mid morning and noon trading.

In the interim, we expect the local currency to remain weak in the absence of improved dollar inflows. The kwacha closed at interbank levels of K5.345/5.365 per dollar.

In the money markets, there was a further reduction in liquidity as the Commercial banks’ aggregate current account balance declined by K89.6 million from the previous day’s balance and stood at K694.50 million. As a result, the cost of funds for Interbank borrowing was up by 1.13% and stood at 11.50% while funds traded on interbank were K120.50 million. The central bank returned to the OMO market and was looking to borrow K250 million through repurchase agreements (repos).

Copper prices on the London Metal Exchange (LME) were still trading at $7, 095.25 per metric tonne unchanged from the previous day’s price while WTI Crude Oil was trading at $94.22 per barrel down by $0.06 from the previous day’s price.

(Reuters) - Weak data fanned expectations on Thursday of more central bank action in Europe, keeping yield-hungry investors focused on the region's stock markets and the dollar near a six-week high against the Euro. With most markets trading in narrow ranges, the dollar rose 0.1 percent against the Euro to around $1.2870, having hit a six-week high of $1.2843 on Wednesday. It gained 0.3 percent against the Yen to 102.57 after the Bank of Japan's efforts to reflate the economy via a massive stimulus program were endorsed by unexpectedly strong growth data from Tokyo. Expectations of more central bank stimulus in the Euro zone reinforced by data showing annual inflation was a below-target 1.2 percent in April kept shares near multi-year highs. The sharp drop in annual Euro zone consumer inflation was led by lower world oil prices, but the data also highlighted how households are not spending and companies are not investing, dampening hopes for a recovery a day after data showed the Euro zone was mired in its longest ever recession.

This information is prepared for indicative purposes only. For firm contracts please contact  Linda Mwenya, Mudenda Syamujaye, Ngono Khayalami or Peter Mwepu.
Tel: 360098  for Linda, 360096 for Finzi or 360097 for Peter,
Or email:
linda.mwenya@cavmont.com.zm
mudenda.syamujaye@cavmont.com.zm
khayalami.ngono@cavmont.com.zm
Peter.mwepu@cavmont.com.zm

Cavmont Bank Ltd accepts no liability whatsoever for any direct or consequential loss arising from the use of or reliance upon any of the information and opinions contained herein.