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| Weak US
dollar helping kina vs major currencies |
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By FRANK ASAELI THE weak US dollar is now slightly aiding the kina against major foreign currencies. Kina continued to strengthen last week after lying flat the previous week as more funds flowed into the banks. ANZ bank’s weekly update said the Central bank this time intervened in the market to mop out access US$. The kina last week appreciated by about 0.8% against US dollar in the interbank. The update said that more funds from the miners and soft commodity exporters are expected to hit onshore this week hence, importers should expect good US$ levels and good crosses on other major currencies in the near future as the kina continue its upward trend. The kina interest rate last week ranged from 0.3475 to 0.3875 and this week it is expected to be between 0.3505 to 0.3900. It was reported that the weekly auction was held for only Central bank bills with no participation from Treasury. Further assistance was given to the domestic market to mop up the excess kina which was carried through from the previous week via a new issuance of K100 million in addition to the week’s maturity of K693.0 million. Pool bidders only soaked up K701.1 million against the offer of 746.0 million in the 28 days, while the 63 days tenure received K54.5 million to exceed the offer parcel of only K47.0 million. Overall, the auction was undersubscribed by K37.4 million. However, despite the under-subscription, interest rates were still under pressure, slipping to 5.16% per annum for the 28days tenure and 5.09% per annum for 63 days tenure. The Australian dollar peaked 0.9402 against the US dollar mid last week supported by strong commodity prices and growing risk appetite before falling to find support at US$0.9335 later during the week and at the time of this writing Aussie unit was trading above US$0.9380. When accommodating strong commodity prices and weak US currency, the Aussie unit is expected to run towards US$0.9500 against greenback in the coming week. The kina will remain weak against Aussie dollar but will depend on the Central bank’s intervention to avoid inflationary pressure that may be exerted from strong Aussie unit. |
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