RMB says the recent gains exhibited by the Zambian kwacha confirm the investment bank’s view that market sentiment is still a key driver for the currency’s performance. Relative to other economies on the continent, RMB observed that Zambia is viewed positively despite facing the same global risks such as food and fuel inflation.
“Recent comments during the IMF spring meetings, that China is now actively participating in the G20 Common framework, has been taken positively by the market and are supportive of current levels,” the bank says in its daily report adding that current momentum suggests that further appreciation of the currency within the short to medium term can be expected. The bank anticipates that the bond auctions that are slated for the end of this week — which are usually characterised by improving liquidity conditions — should support USD/ZMW levels of 16.50. “Month to date, the kwacha has already gained 6.5 percent, making it one of the best performing currencies across the developing markets.”
