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Zimdollar depreciates

by Staff reporter
22 Dec 2020 at 17:40hrs | Views
Parallel market Zipit rates have held steady within the 110-115 range although it seems that volume sellers were scarce within the past couple of days. At the same time, the local currency slipped against the US Dollar at the latest and last auction of 2020. The Zimbabwe dollar was down 0.061% to trade at 81.7866 for the rest of the year from 81.7368 in the previous week.
The depreciation comes as the Reserve Bank of Zimbabwe noted that reserve money was down by $1.76 billion to $15.99 billion in the week to December 11. Government deposits with the Central Bank increased by $1.68 billion while a total of $72.88 million was injected into the economy through issuance of currency.
At the auction, bids came in lower as they totaled 347 from the previous week's 485 as companies entered their closed periods. A total of US$29.58 million was apportioned to both the Main Auction (US$27.91m) and SMEs (US$1.67m) which is down from US$31.9 million allotted last week. Highest and lowest allotted bids remained unchanged at 86 and 80 respectively. Likewise the spread between bids remained at 7.50%.
Raw materials continued to receive the highest allocation at US$13.8 million, Machinery and Equipment US$4.85 million, Fuel, Electricity and Gas US$2.7 million, Services $2.9 million. Other amounts below US$2 million were allotted to Consumables, Retail and Distribution, Pharmaceuticals and Chemicals and Paper and Packaging.

The difference in the average weighted rate and the highest bid was flat this week as it came in at 5.39% the same as the previous auction. The difference between the parallel market rate and the weighted average rate remained flat at 27.35% amid speculation that input purchases for the current agriculture season had pushed up the rate although it remained range bound.
The UK entered a new lockdown as it discovered a new strain of the coronavirus, and this has affected world travel and markets. Cryptocurrencies reacted in a bearish manner at week opening despite increased uptake of the Pfizer and Moderna vaccines. As a result Bitcoin lost 1.90% to $23 126.24. Ethereum and Bitcoin Cash also saw a day of losses on the market with the former shedding 5.13% to 618.94 whilst the latter closed 9.58% weaker at $327.50.

Source - finx