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Zimdollar continues to regain strength

by Staff reporter
15 Sep 2020 at 17:40hrs | Views
The Reserve Bank of Zimbabwe allotted its highest foreign currency to date at the weekly foreign currency auction today as the local currency continues to regain strength.
The Zimbabwe dollar gained 1.2% to 81.7076 from 82.6993 last week. A total of US$21.2 million was allotted to various sectors of the economy, with the main auction taking US$20 million and the SMEs taking US$1.14 million. However there are still reports of 2-3 weeks delay in allocations, which, as reported last week, are mainly due to structural settlement issues in the banking sector (one commercial bank) particularly over how offshore nostro dollars are cleared.
According to results from the RBZ, raw materials were allotted US$8.72 million, Machinery and Equipment US$3.42 million, Services at US$2.13 million, Consumables US$1.69 million, Retail and Distribution US$1.67 million. Pharmaceuticals and Chemicals, LPG Gas, Paper and Packaging and Fuel and Electricity also received amounts above US$1 million as all categories bid amounts above the benchmark
The lowest rate was at $75 and the highest rate at $88. The difference between the highest and lowest bid narrowed after it moved to 17.33% from 20.55% last week. The average weighted rate is now 7.15% lower than the highest bid from 6.02% last week due to its continued appreciation. The parallel market rate and average weighted rate difference increased to 28.95% from 28.09% a week ago.

On the parallel market, trades continue to come far and wider, as RTGS is hard to come by after the as the RBZ has to date managed to keep a tight leash on money supply.  A buyer has been witnessed in the market as spatial high volume transactions are being recorded although the transactions are failing to push through the rates above the current resistance levels.
The Zipit buying rate between 105-107 and the selling price for traders has remained stuck at 115-120 for large amounts. Mobile money rates were quoted at 95-98 for both One Money and Ecocash transactions. Zipit for lower amounts is currently at 102 per US$100.
The US dollar has been softening ahead of the Fed meeting, which saw gold pick up as well as fed treasury yields in the process.

Source - finx