- Tax conversions and offshore treasury bond interest to offer support in the next fortnight
The Kwacha is expected to trend bullish this week as the tax season window opens. The copper currency last traded at 13.24 on Friday 07 June reversing some of the gains it earned earlier last week when the copper currency rallied to 13.1 levels.
Support is expected from conversions by corporates looking to fund their mid month tax obligations however the rally will be capped by the mines remitting mineral royalty taxes in dollars directly to the central bank.
The local unit is forecast to trade stronger few points below 13.
The Kwacha could appreciate to levels of 12.9-12.95 for a unit of dollar supported by the conversions this week. Tax season window opens on the 10 -16 May. There could also be offshore interest in Friday’s 28 June bond auction given attractiveness of yields, an unnamed trader said in the capital.
The Bank of Zambia will offer 1.65 yards of local currency fixed income paper which will be the third bond sale of 2019.