Exchange rate crosses the 86 mark to the USD
The Zimbabwe dollar continued with its gradual weakening on the official foreign currency auction system amid a widening gap between the official exchange rate and the parallel market exchange rate.
At yesterday’s auction, the local dollar traded at 86.0551 against the greenback, the first time the weighted average exchange rate has crossed 86 since the auction’s inception on June 23 last year.
The steady decline in the official exchange rate comes as the parallel market has moved from 150 two weeks ago to approximately 160 at present.
Yesterday’s auction saw US$46,5 million being allotted with the bulk of the funds amounting to US$13 million and US$8,5 million going towards the importation of raw materials and machinery respectively.
Meanwhile the Monetary Policy Committee (MPC) agreed to refine the auction system to enhance its purpose as a dependable and efficient mechanism of availing forex to the economy by aligning the bidding process to the ultimate beneficial ownership.
Reserve Bank of Zimbabwe Governor Dr John Mangudya said in a statement on Monday, after the MPC’s meeting on August 27, 2021, that measures to refine the auction system will include maintaining the US$500 000 and US$20 000 maximum bid limits for primary producers under the main auction and SMEs auction, respectively as well as capping bid limits for secondary users, consumables and services at US$100 000 under the main auction.
The MPC also recommended that the RBZ should clear the US$175 million outstanding bids at the foreign exchange auction within a month in line with the set rules of funding allotments within two weeks.-ebusinessweekly
