Zambia’s kwacha rose to its strongest level in seven months on Thursday after Moody’s said Glencore’s investment in new copper mines in the country would lift growth, a rise in the copper price and dollar sales, according to Reuters.
By 1440 GMT the kwacha had extended gains to 5.29 percent, trading at 9.8600 dollar, a level the copper-producing southern African country’s currency last touched in September.
“There are no takers of dollars due to tight kwacha liquidity,” one commercial bank trader in Lusaka told Reuters.
Global miner and commodities trader Glencore plans to invest more than $1.1 billion to sink three copper mine shafts in Zambia, with more investments in the pipeline.
Ratings firm Moody’s said Glencore’s investment would spur economic growth in Zambia to 5 percent in 2018.
“The Moody’s report was good and also the recent bounce in copper prices was supportive,” said Zambia analyst at Cape Town based NKC African Economics Irmgard Erasmus.
Global copper prices staged a modest recovery recently on the back of a weakening dollar as comments from the U.S. Federal Reserve suggested it could delay raising interest rates.
Reuters