Report: Zimdollar stabilises against the real dollar. Little movement was seen on the foreign currency auction on Tuesday as the Zimbabwean dollar closed with a marginal depreciation of 0.43% against the US$ to 82.9214
According to the results from the Reserve Bank of Zimbabwe, a total of US$14.32m was apportioned to both the main auction (US$13.6m) and SMEs (US$0.517m) after a combined 173 bids were accepted from a total combined 186 bids. The highest allotted bid was 88.38, with the lowest allotted being 78.
Given that the auction comes just two trading sessions after the last one on Thursday last week, the number of bids received was lower at 113 from 171 last week and before that 237, 228, 290, 289 and 264. This, together with the drop in value volumes, signals tightening liquidity in the market and comes after the RBZ reported a continued downward trend on reserve money to $13.35 billion on August 7, largely reflecting a decrease of $908.14 million in banks liquidity.
As has been previously noted, key to the success will be its performance during the traditionally dry forex period between Sept-January. A total US$136.96 million has been traded on the auction since the June 23 start. The country requires US$80 million monthly for its forex needs.
This week the highest rate was 88.38, dropping down from last week’s 90 and the lowest rate for the main auction coming in at 80 which was higher than the 77.0160 of last week thereby narrowing down the spread between bids. SMEs highest rate was 85 and the lowest bid rate was 78. Lower bids are expected going forward as companies are now liquidating forex for working capital.
Raw materials continued to receive the highest allocation after it got US$5.88 million as the narrative moves towards production. Machinery and Equipment was allotted US$2.93m, Consumables received US$2.02 million. Pharmaceuticals was the last category to receive over a million with US$1.28 million. Retail and distribution, Consumables, Services were among other sectors to be allotted funds through the auction system today.
The official rate remained at par with the cash parallel market rate which currently stands at 82. The Zipit rate also remained stuck at 115-120 for large amounts. Mobile money rates were quoted at 95-98 for One Money and 90-96 for Ecocash transactions. Zipit rates for large amounts are now subject to negotiation as a lot of the volume is now being catered at auction. The range remains between 100-110 while low amounts are attracting rates between 98-100.
Source – Bulawayo24 News
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