Zambian kwacha posts biggest weekly gain this year

Zambia’s kwacha has posted its biggest weekly gain this year, hitting a nearly two-month high due to local selling of dollars, in part by companies needing kwacha to pay salaries, traders said. Having opened the week at 5,100 to the dollar, the currency of Africa’s largest copper producer strengthened to as much as 4,920 on Friday, a gain of 3.5 percent. It closed at 4,960. In a daily bulletin, Standard Chartered Bank Zambia said market sentiment pointed to further strengthening, although it said importers might be tempted to buy dollars at these levels, arresting any further gains. The currency, which had strengthened from historic lows of around 5,700 in early 2009 as copper prices rebounded, fell sharply in May this year as worries about European debt caused investors to dump riskier emerging and frontier market assets. The price of copper, another factor underpinning the currency, has risen more than 4 percent this week, although is more than 15 percent off a year-high reached in mid-April.

REUTERS

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