Zambia's kwacha extends slide

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Zambia’s kwacha Reuters. A man displays a 50,000 Kwacha note in Lusaka in this file picture.

Lusaka - Zambia's kwacha extended its recent slide on Wednesday, falling more than 2 percent to hit a new record low against the dollar, battered by lower copper prices and growing demand for the greenback.

The kwacha was at 6.40 at 09:32 SA time after earlier touching a 6.42, a drop of around 2.3 percent against the dollar.

The currency of one of Africa's top copper producers is down more than 15 percent so far this year.

Copper prices on the London Metal Exchange last week hit their lowest since July 2010, sparking concern about the Zambia's copper-dependent trade balance.

Market analysts ETM Analytics said the kwacha could suffer further losses as prices of the metal continued to fall.

“A slump in the price of copper has been the main catalyst of the kwacha's fall, with the metal remaining under pressure around the $6500 per metric tonne level,” ETM said in a research note.

Increased dollar demand and outflows triggered by tighter developed market monetary policy were further increasing downside risks, ETM added.

Zambia's central bank has said it will continue to intervene to stabilise the kwacha in an attempt to a calm a foreign exchange market it has described as gripped by panic. - Reuters

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