Official rate eases marginally to 81,71

18 Nov, 2020 - 02:11 0 Views
Official rate eases marginally to 81,71

eBusiness Weekly

Tawanda Musarurwa

The Zimbabwe dollar eased 0,04 percent against the United States dollar, trading at 81,71 from 81,67 last week, remaining largely range-bound with no significant shifts in the economic fundamentals.

The Zimbabwe dollar has been trading around the 81 range for the past weeks, looking unlikely to reach the peak of 83,39 that was set on August 25. Since that time, the local unit has been fluctuating, albeit mostly strengthening, by circa one hundredth of a percent on average.

The Reserve Bank of Zimbabwe (RBZ)’s latest auction saw total bidders on both the main auction and the SMEs board continue to tick upwards, pointing to growing confidence by a diversity of business players.

On the main auction, the total number of bidders jumped to 294 from 268 bidders last week, bettering the previous highest number of bidders at 274 from 256 bids from the big corporates that were successfully alloted a total of US$27, 43 million.

The highest bid on the main auction rose to $90 from $86,3 last week, while the lowest accepted bid remained on $80. And on the SMEs auction, the highest bid increased to $86 from $85 last week, although the lowest successful bid returned to $79 from $80 previously.

Total bids on the SMEs board also spiked to 192 from the previous high of 152 last week, although 17 bidders were unsuccessful.

Total foreign currency allocation was lower at US$29,7 million from US$31 million previously, with the main auction accounting for US$27, 43 million. SMEs, however, took up higher value at US$2,3 million (a record high) from US$1,84 million in the last auction.

Meanwhile, the authorities are working to bring more efficiency to the foreign currency auction system, as there have been complaints by some players of processing delays.

Said Monetary Policy Committee (MPC) member and economist Professor Ashok Chakravarti recently:

“That clearance process can take some time because, in the case of nostros, some of this clearance has to be done through New York and we don’t have many correspondent relationships and the issues of sanctions, all these things cause delays.

“So the flow of foreign currency is a bit slow. The money is there but it takes some time for all this money to flow through the whole system.”

Since its inception the foreign currency auction system has alloted a total of US$464 million, with weekly allocations gradually rising from an average of US$15 million to current levels of around US$30 million. This is despite the central bank remaining the sole supplier of foreign currency on the auction system.

Banks are said to be dealing with their clients outside the auction system, although utilizing the prevailing auction rate.

The productive sectors continue to benefit from the auction system, with latest figures showing that raw materials accounted for the bulk of allotments yesterday at US$11, 09 million on the main auction and US$530 608 on the SMEs section.

Machinery and equipment came in second with US$5,6 million on the main and US$578 959 on the SMEs section.

And consumables came in third on the main auction at US$2,09 million; but on the SMEs section, consumables took up US$478 606.

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