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Zimdollar stable against the real US dollar

by Staff reporter
13 Oct 2020 at 19:54hrs | Views
The Reserve Bank of Zimbabwe says on average US$5-$6 million is trading formally outside the foreign currency auction system every week within prescribed margins while there has been an increased number on non-traditional firms now accessing forex on the auction.
RBZ governor John Mangudya said that the trend of trades outside the auction system was encouraging as the auction only served as a price discovery system. This comes as the local dollar continues to oscillate around the cash parallel rate of 80-82. In the latest auction, the ZWL was near flat moving by 0.003% to trade at 81.3458 against the dollar from 81.3486 attained late last week.
The apex bank has also continued with its open market operations as a way of buying foreign currency on the market to finance the auction system. This has reduced the borrowed funds ratio on the forex sold while meeting demand for bids made has increased the confidence in the market, thereby solidifying the auction currency market.
The highest bid rate was 88.07, increasing from last week's 87.00 and the lowest rate for the auction coming in at 79.00 which was unchanged from last week. This saw the spread between bids increase for the first time in six weeks to 11.48% from 10.13%.
A total of US$29.23m was apportioned to both the main auction (US$27.4m) and SMEs (US$1.83m) after a combined 382 bids were accepted from a total combined 418 bids.  This brings the total amount traded since inception to around US$320m.

Raw materials continued to receive the highest allocation at US$11.80m as the narrative continues to favour production. Machinery and Equipment was allotted US$4.99m, Consumables received US$2.98m, Services got US$2.8m and Fuel, Electricity and Gas got US$2.54m. Pharmaceuticals and Chemicals, Retail and Distribution and Paper and Packaging were among other sectors to be allotted (less than US$2m) funds.
The cash parallel market rate like other parallel market rates has remained stagnant for nine weeks now as it currently stands at 82. The Zipit rate fell to 105 from 110 for large amounts. Mobile money rates were quoted at 98. Zipit lower amounts are currently at 100 per US$100.
Fears of a second coronavirus wave has left investors flocking into tech stocks with markets hitting two-week highs. Bitcoin was down 2.94% to $11 439.96. Ethereum and Bitcoin Cash saw a contrasting day, with the former losing 4.95% to $379.56 while the latter closed 4.44% stronger at $281.23.

Source - finx