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Increased demand for US$ on black market

by Staff reporter
08 Dec 2020 at 18:27hrs | Views
An increase in US$ demand on the parallel market has seen the rate shifting upwards although it remains range bound. Rates are being quoted from $105 to $120 with demand mostly coming from small traders and individuals who are stocking up for the festive season. At the opposite end, the local currency appreciated after a six-week depreciation after it closed today's auction at 81.8576 from 81.8765 attained last week.
 
The highest allotted rate for both auctions was at 86, which is down from last week's 90 while the lowest rate was at 80. This narrowed the spread between to 7.50% from 12.50% last week. Main auction bids fell to 236 from 268 last week, a trend which will likely be sustained as companies go into their shut down periods characterised by minimal trading. Bids from the SMEs sector, however, increased to 188 from 166 last week as most big companies who might not need the US$50 000 minimum are being accommodated at the smaller auction instead. Settlement terms for the SME auction are immediate while the main auction is still facing challenges only for settlements due to two banks.
 
A total of US$30.27 million was apportioned to both the Main Auction (US$27.72 million) and SMEs (US$2.55 million) after a combined 424 bids were accepted and 43 were rejected. The difference in the average weighted rate and the highest bid narrowed this week as it came in at 4.82% from 9.03% of the previous auction. The difference between the parallel market rate and the weighted average rate was at 22.04%.
 
Raw materials continued to receive the highest allocation at US$13.16 million, Machinery and Equipment US$5 million, Consumables US$2.93 million, Services $2.28 million, Retail and Distribution $2.36 million Fuel, Electricity and Gas US$2.45 million. Other amounts below US$2 million were allotted to Pharmaceuticals and Chemicals, Paper and Packaging.

Mobile money rates were unchanged at 98 and the cash rate held steady at 82. For change purposes, a lot of traders are using a rate of 80. Zipit for smaller amounts were at 100-103.
 
Cryptocurrencies are facing value reverse as they saw heavy losses on Tuesday as some traders are cashing in and going to Asia as it is seen as the growth continent of Q1 2021. As a result, Bitcoin lost 1.47% to $18 896.75. Ethereum and Bitcoin Cash also saw a day of losses on the market with the former shedding 2.09% to 577.82 whilst the latter closed 2.89% weaker at $275.57.

Source - finx

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