Kwacha loses 3.4 percent in October as pressure mounts

It also cited increased seasonal demand for dollars from importers of fuel and agricultural inputs, coupled with a narrowing real policy interest rate, which stood at approximately 4.45 percent.

Access Bank Group said these factors had weakened the attractiveness of Kwacha-denominated assets to investors, while strong foreign exchange demand and subdued inflows were likely to sustain pressure on the currency in November.

The bank expected the Kwacha to remain under pressure ahead of the presentation of the 2027 National Budget on November 6 and the Bank of Zambia’s Monetary Policy Committee meeting later in the month.

It projected that the local currency could test K21 per dollar, identifying resistance levels at K20.50 and K21, while support levels were expected at K20 and K19.70.

However, the bank said several factors could help cushion the Kwacha against a disorderly depreciation.

These include copper prices remaining above US$14,000 per tonne, Moody’s recent upgrade of Zambia’s sovereign credit rating and the pending approval of the country’s proposed US$1.472 billion International Monetary Fund programme.

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