Kwacha could firm to 4,650 vs dlr by Q1 2011
The Zambian Kwacha is expected to rally more than nine percent against the dollar by the first quarter of next year, supported by higher maize and copper export earnings, a Reuters poll showed on Monday.
The kwacha has lost some ground against the greenback over the past few weeks, mostly due to global risk aversion, and was last bid at 5,080 on Monday, off its strongest level this year of 4,370 which it touched in January.
The currency should however gradually claw its way back against the dollar, ending this year at 4,750, according to the median forecast of 10 analysts polled by Reuters.
A further rally in the first three months of 2011 could see it end that quarter at 4,650, as dollars flow in from maize exports after the southern African country reaped a good harvest of the staple grain.
“It is expected that the kwacha will perform well in the coming months, considering the bumper harvest the country has recorded in the 2009/10 season,” said Mudenda Syamujaye of Zambia’s Cavmont Bank Limited.
A government crop survey showed the country produced 2.7 million tonnes of white maize in 2009/2010, beating last season’s harvest of 1.9 million tonnes and leaving a surplus of 1.1 million tonnes.
“Maize exports are expected to increase (and) increased copper production from the new mines, with sustained mineral prices, is also likely to support the kwacha in the long term,” added Syamujaye.
Africa’s biggest copper producer has weathered the global economic slump relatively well, buoyed by rising copper demand and a recovery in prices of the metal.
Zambia’s central bank has said copper exports jumped to 675,384 last year from 587,125 tonnes the previous year.
Output of the mineral rose 14 percent to 697,860 tonnes last year and Zambia has previously said production could hit 1.0 million tonnes by 2011 as new mines come on stream and expansions and upgrades take place at existing mines.
In the Reuters poll, forecasts for the kwacha in the first quarter of next year ranged between 4,600/dollar and 5,500/dollar.
Some analysts believed the currency could weaken in coming months, weighed down by continued lack of appetite for risky assets in the face of debt woes in some European countries, which have seen the euro lose ground against the dollar.
“The Zambian kwacha is suffering amid fears over a declining euro, which have precipitated a rush towards U.S. dollars”, said Lisa Lewin of the London-based Business Monitor International.
“If the kwacha falls through key technical support at 5,300 per dollar, further depreciation to 5,700 cannot be ruled out.”
A Reuters weekly Africa currency look ahead last week showed the Zambian kwacha was seen strengthening this week due on corporate demand for the local unit to pay taxes.
13 Responses to Kwacha could firm to 4,650 vs dlr by Q1 2011
Go Social
I have a problem with the straight jacket mentality of our Central Bank. These people have been entrusted with the wealth of Zambia i.e. the current reserves of US$2.7 billion. I want to know why these reserves are not invested in assets like gold? The Zambian public deserves to know why Zambia’s reserves are being in fiat currencies that are not backed by gold.
Library - June 22, 2010
13:48
Desperation, A few weeks ago some clown was saying traffic conjestions are a sign of an economic boom. Kuya bebele RB!
Jahman - June 22, 2010
12:00
How can one just use two economic parameters to gauge the value of the kwacha.To me the analyses above is all theory.To start with,the mines are not owned by the government,secondly,Zambia only receives the revenues from copper after the financial year end by the individual miners.Thirdly,copper is sold either at spot price or futures price,so which portion of this copper is in futures or spot.And to just say,Zambia will produce 600,000 tonnes copper without categorising the types of copper exported is not only ignorant but also lack of proper economic analyses.Copper is either exported as concentrate,anode or blister copper or cathodes.The prices being referred to in the article are those of copper cathodes(99.99+%),the rest of the copper sells below this price.If like during ZCCM days we owned those mines,then the above article would have made more practical sense coz all the monies made would be going into a Zambian bank account writen in ZCCM’s name.
General Laurent Nkunda - June 22, 2010
09:47
I dont need tribal people in our country like the Bemba power anyway
countryboy - June 22, 2010
08:34
…….
Mac - June 22, 2010
01:20
useless
mumbi - June 22, 2010
00:37
Mwanawasa left the rate at 3200 to a dollar! then came Dora Siliya, the dollar eater and her chende friend Lupiya, oh Rupiah!
mbimbe - June 22, 2010
00:10
We are coming. Zambia need not worry when we rule.
Bemba Power - June 21, 2010
23:37
Towa – I guess you do not discriminate in your hatred of over 60s and include Sata in your diatribe?
African and proud - June 21, 2010
22:36
senior citizen, you have no confidence in advancing your own candidature? why are you focussing on 60+ years aged, used, second hand politicians, like RB? we can take zambia to greater heights without mmd and your banda, abash
Towa - June 21, 2010
21:51
Zambians will not eat the rubbish of Sata but ongoing national development.
Residents Commend Govt for New Chongwe Hospital
CHONGWE residents have commended the Government for building a district hospital that will help decongest the health centre in the area.Some residents interviewed, mostly women, said the construction of the hospital was a step in the right direction.
Emeldah Mweene, a mother of four and a trader at Chongwe Market, said at the weekend that the hospital project had brought joy to many residents of Chongwe some of whom preferred to stay at home whenever they were sick for fear of congestion at the only health centre in the district.
Mrs Mweene said that some pregnant women died in their houses because of failure to seek antenatal services citing congestion, while under-five children had also been denied proper medication.
“We want to thank President Rupiah Banda for considering us in Chongwe and for building us a hospital which will save lives,” she said.
And Evans Haatyole advised Zambians to avoid politicising developmental projects such as construction of schools, roads and health facilities.
“We cannot eat politics and it is important that Zambians acknowledge this fact because if politics is allowed to dominate everything we do, then very little developmental programmes will take place,” Mr Haatyole said.
Chongwe District Commissioner Japhen Mwakalombe said more than K3 billion has been spent on the construction of the hospital and reiterated Government’s commitment to making health services accessible to all.Mr Mwakalombe appealed to the residents to ensure the new hospital was not vandalised because that would be retrogressive.
Mwata - June 21, 2010
21:42
Welcome back Senior Citizen? We didn’t miss you anyway!
KAPATAMOYO - June 21, 2010
21:08
The country is on a track to economic emancipation. This is why the parochial leadership of Sata has no place in contemporary political order. Its utopian call for r re-nationalization of the economy and all engines is not only a thoughtless myth of some disingenuous chap, vents of comical politics. The current economic reforms have created ideal pro prosperity marketplaces developed under public-private partnerships as a means to promote urban and rural revitalization against historic failures and downtowns.
It is not surprising that many patriotic citizens- critics or otherwise have welcomed the return of public life and collective narratives in these new economic enterprises the spirited RB administration has ushered. Because we are in a mature and model democracy, pessimists do exist event by the fact that others have lamented of some imaginary exclusionary nature, ideological manipulations, and formulaic aesthetics but such is imaginary. The way forward is this unstoppable responsible economic crusade reforms carry.
Lets work hard and keep embracing the spirited leadership of President Banda than curve to utopia of illiterate deviants without national character or leadership. The future of this country beyond 2011 is with the inclusive MMD leadership. MMD has domestic and foreign policies a growing democracy need to nurture in.
Senior Citizen - June 21, 2010
19:25