Zambia’s kwacha advanced by the most in three months against the dollar because of sustained inflows of the greenback, according to Zambia National Commercial Bank Plc.
The currency of Africa’s second-biggest copper producer rose 3 percent by 10:54 a.m. in Lusaka, the capital, to trade at 7.44 per dollar. That’s the biggest gain since April 10 and the strongest level since July 3. The kwacha has climbed 5.7 percent since it reached a record low of 7.89 per dollar on July 15.
“In the short term, the kwacha is expected to continue its bullish run against dollar on the back of sustained supply and the possible unwinding of long dollar positions,” the bank said Tuesday in an e-mailed note to clients.
The kwacha has struggled against the dollar this year amid broader U.S. currency strength and the falling price of copper, which accounts for about 70 percent of Zambia’s foreign exchange earnings. The metal closed at $5,480 per metric ton in London on Monday, a 22 percent drop in the past 12 months.
Cavmont Bank said in a Monday report that dollar supply increased as local companies prepared to meet month-end payment obligations. FNB Zambia said Tuesday some of the dollar inflow could be because of demand for the treasury bill sale later this week.
Officials from the Bank of Zambia and Finance Ministry are in the U.S. this week to market a planned $2 billion Eurobond, a person familiar with the matter said July 14.