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Saturday, 6 December 2008

How low will the Kwacha go?

Very low, according to the folks at Emerging Markets Monitor :

The Zambian kwacha is testing key support at ZMK4,700/US$, but given our view that copper, which was trading at US$3,435/tonne at one point on December 4 2008, is likely to head even lower in the short term, to US$3,000/tonne or even US$2,500/tonne, we believe the kwacha is likely to breach this level. Assuming US$2,500/tonne is the bottom for copper (though there is no guarantee of this) we would expect to see the kwacha hit its lowest level in three years, ZMK4,850/US$, where the currency should find some support.

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