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Zimdollar depreciates 4.37% to 68.89 to the real dollar

by Staff reporter
14 Jul 2020 at 19:06hrs | Views
The local currency depreciated a further 4.37% to the dollar to 68.8879 at the fourth auction as the spread between bids narrowed significantly to just 21 from 35 last week and 65 at the first auction. The highest allotted rate was at 85 while the lowest was 64. Total allocations made were at US$15.98 million cost was at $1.1 billion.
According to the Reserve Bank of Zimbabwe update, the total number of bids received was at 289, but 59 were rejected for various reasons which include overdue CD1 forms and positive FCA balances. RBZ stats show FCA balances of over US$1 billion made up of US$200 million exports, Domestic nostro corporates US$400m, individual nostros US$75 million, NGOs US$100 million and other FCAs from loans drawn down US$300 million Total bids received were US$18.71 million.
The highest bid submitted today was 85 with the lowest being 40 but however the lowest bid to be allotted money today was a bid of 64.20, implying that majority of the bids were at the upper 60s level. The rate is expected to reach equilibrium within the 70s range while there should be an increase in the liquidation of nostros towards the end of the month.
Raw materials received the highest allocation at US$5.62m as the narrative moves towards production while fuel and electricity returned to the auction system with an allocation of US$528 200 inclusive of gas. Machinery and Equipment received US$3.01 million, Retail and distribution US$2.47 million, Pharmaceuticals and Chemicals US$1.26 million and Consumables US$1.41 million. Other allocations included services, which included loans, dividends, and disinvestments, which were missing from the last two auctions, at US$900 526.72 and Paper and packaging US$761 500.
This week's rate is inching closer to both our fair value rate, the Hard-Boiled Egg Index, and cash rate of 75. Parallel markets are flat at between 90-100 as liquidity remains tight. Zipit rates on big amounts are at 110-120 while small amounts are from 93. Mobile money rates are from 85-93. There is however increased Rand to US trades with dealers paying rand in South Africa for USD in Harare on selected banks.

Source - finx