Zim$ gains ground against US$ again
THE Zimbabwe dollar is gaining ground for the second week in a row against the United States dollar after the exchange rate continued to stabilise, closing Tuesday’s auction at $82,7 from last week’s rate of $83,32.
The local unit last week appreciated against the United States dollar for the first time since it was floated late June. This week it kept the momentum gaining a further 0,9 percent, from $83,32 last week, signalling that it had reached its equilibrium.
The recent stabilisation of the exchange rate has positively impacted on production with industry executives saying access to forex has improved while previous price increases have since halted. Parallel market activities have also eased amid enforcement of monetary reforms, which have seen many illegal money changers struggling.
An update from the Reserve Bank of Zimbabwe (RBZ) after the Small to Medium Enterprises and the main foreign currency auction sessions conducted Tuesday also showed that a total of US$19,2 million was allocated to nearly 245 bidders, with 46 bidders having been disqualified.
Foreign currency is allocated according to a set national priority list. Bids of US$18,3 million were on the foreign currency auction market with US$876 674,44 on the SMEs auction.
Allotments from the two auction systems were largely for raw materials, machinery, retail and distribution, services, fuel, electricity and gas as well as paper and packaging among others.
The SMEs auction received 74 bids, with 15 being rejected while the main foreign currency auction had a total of 216, with 31 being disqualified.
Previously fixed at $25 to the US dollar, the local unit depreciated by over 50 percent the first time it was freely traded on June 23. Since then it had been on a free fall, which began to show signs of stabilisation at week seven of the weekly auctions. The lowest the local unit has depreciated to date is $83,39 to the greenback.
Business leaders have lauded the stabilisation of the exchange rate, which is, however, still trading below the parallel market that ranges between $90 and $105, but has been largely restrained since introduction of the foreign currency auction.
At Tuesday’s auction, the highest rate on offer was $88 while the lowest accepted rate was $73.-chronicles
