THE Zambian kwacha is expected to slide further against the dollar in the final four months of the year amid huge corporate and retail demand for dollars and lack of central bank intervention, senior dealers said. They said the kwacha could close the year as low as 3500 against the U.S. unit, from 3250 now and 2400 a year ago. Traditionally, retail demand for dollars increases in Zambia towards year-end as the country goes on a Christmas spending binge which appears huge for an impoverished country. Analysts had predicted the kwacha would firm after the privatisation of Zambia’s vast mining business in March and an increased inflow of donor funding, but forecasts have been scuttled by a policy shift. The government says it wants to raise official reserves to at least one-and-a-half months of imports cover at end-December 2000 from two weeks cover at the same point last year. – Reuters
August
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