By Cecilia Chiluba 
An Investment Advisor says the Kwacha is not likely to trade around K15 or K20 against the United States Dollar but may level off somewhere around K25.
The US Dollar is currently buying at Twenty-Four Kwacha Twenty Five Ngwee and selling at Twenty-Four Kwacha Sixty Three Ngwee.
Speaking in an interview with Money News, Munyumba Mutwale noted that the market is still speaking to positive sentiment in terms of the 200 daily moving average, as well as momentum that is pushing the exchange rate downwards.
“Somewhere around K24 and K26 seems to be that right spot. So we are looking like we will level off somewhere around K25. K25 looks like it is going to be the leveling off point.”
“So the market is just going through this fidgeting, where its going up-down. Therefore, in the medium-term, we are probably going to see much more of this market fidgeting until we get to full stabilization probably around this K25 point,” Mr. Mutwale stated.
He explained that what is currently influencing the Kwacha’s exceptional performance is more positive sentiments about Zambia than there is negative sentiment about the global dollar.
“Sentiment seems to be pointing positive, it is not directly pointing positive. Like we said the 200 daily moving average is bending positive. In other words, the market has reached a consensus that about K26.9 was the highest long- term view they were looking at for the exchange rate.”
“And it has started to bend back downwards because it appears that sentiment towards the country and stability economically as well as politically has reached that neutral state, so everyone is saying it seems that policy is stable and we are on the right trajectory and we do not seem to be accruing a lot more debt, we are really all about trying to dismantle it. So that is one factor,” he noted.
Mr. Mutwale however said sentiment can change at anytime because it is not backed by anything yet.
“Until we see this being backed by actual FX inflows that are of the levels that we saw in 2021, when we were seeing US$200 million and US$300 million, that is when we can say the sentiment is being backed by something,” Mr. Mutwale stated.
Joseph Tembo