News / National
Zimdollar weakens by 0.75%
11 Oct 2023 at 01:30hrs | Views
The Zimbabwean dollar (ZWL) experienced a slight 0.75% depreciation on the Reserve Bank of Zimbabwe's (RBZ) Foreign Exchange Auction this week. This was due to a substantial allocation of foreign currency to the country's key economic productive sectors.
According to a trading update issued at the close of business on Tuesday, the exchange rate declined to US$1: ZWL 5,633, down from the previous week's rate of ZWL 5,591, representing a 0.75% decrease.
As a result, traders are permitted to set the US dollar exchange rate at a maximum of ZWL 6,196, considering a margin of +/- 10% above or below the official exchange rates.
At this rate, exchange rates have remained relatively stable, closely tracking the parallel market rates, where ordinary trades are offered at premiums of US$1: ZWL 6,500. Nevertheless, certain participants in the alternative market are setting even higher premiums depending on demand dynamics.
On the Wholesale Auction platform, where banks purchase foreign currency for resale to their clients, a total of 17 bids were accepted, resulting in an allocation of US$18.1 million, which falls short of the US$20 million available.
Market observers suggest that this trend indicates that liquidity levels in the market remain under control since not all the foreign currency on the Auction platform is fully purchased.
On the Retail Auction platform, a total of US$1.86 million was allocated, with allocations of US$552,534 for raw materials, US$468,099 for machinery and equipment, US$209,539 for consumables, US$323,296 for services, and US$175,616 for retail and distribution, among other categories.
According to a trading update issued at the close of business on Tuesday, the exchange rate declined to US$1: ZWL 5,633, down from the previous week's rate of ZWL 5,591, representing a 0.75% decrease.
As a result, traders are permitted to set the US dollar exchange rate at a maximum of ZWL 6,196, considering a margin of +/- 10% above or below the official exchange rates.
At this rate, exchange rates have remained relatively stable, closely tracking the parallel market rates, where ordinary trades are offered at premiums of US$1: ZWL 6,500. Nevertheless, certain participants in the alternative market are setting even higher premiums depending on demand dynamics.
On the Wholesale Auction platform, where banks purchase foreign currency for resale to their clients, a total of 17 bids were accepted, resulting in an allocation of US$18.1 million, which falls short of the US$20 million available.
Market observers suggest that this trend indicates that liquidity levels in the market remain under control since not all the foreign currency on the Auction platform is fully purchased.
On the Retail Auction platform, a total of US$1.86 million was allocated, with allocations of US$552,534 for raw materials, US$468,099 for machinery and equipment, US$209,539 for consumables, US$323,296 for services, and US$175,616 for retail and distribution, among other categories.
Source - NewZimbabwe
