As the festivities draw nigh, spend by retailers has fueled dollar demand outstripping supply, thereby pushing the kwacha to ZMW12.03/USD for a unit of dollar. This move represents a 2.29% loss from start of week levels of ZMW11.65/USD.
Most retailers are gearing up stock in readiness for the Christmas season as such have to pay for imports in dollar.
With the mineral royalty tax window opening on the 15 Nov. it is expected that the local unit will have some support from dollar conversions to kwacha to meet taxation obligation.
Demand side fundamentals are expected to exceed the supply side thereby exerting pressure on the kwacha in this period.
In global markets, the dollar index is stronger from geopolitical tensions as Brexit progresses and the US Fed hints rate hikes beginning Dec. This has fueled a strong dollar environment by default resulting in a sell off in emerging market assets.