Exchange rate slightly moves

The official auction rate moved to $84,1197 to the US dollar yesterday, drifting 0,16 percent or around 13 Zimbabwe cents since last week with US$35,56 million allocated in total on the main and SME auctions.

All valid bids were allotted in full, as has become the norm. There were 507 valid bids, 223 on the SME auction and 284 on the main auction. Another 49 main bids and 75 SME bids were rejected for a variety of reasons.

Either bidders had not accounted for previous imports and exports by the deadline, or had not exhausted all foreign exchange holdings in their own nostro accounts first, had not submitted the required invoices, or were bidding for goods and services not covered by the two import priority lists.

Since the beginning of this month, the Zimbabwe dollar has eased around 23 Zimbabwean cents or around 0,275 of one percent over the four weeks. Since the last auction of last year it has eased $2,33 or 2,85 percent.

Some easing was expected as Zimbabwean monthly inflation, despite dramatic falls, is still above that of the US itself.

However, the easing has been minimised by the ability of the Reserve Bank of Zimbabwe to continue funding currency requirements for priority imports after a brief signal in January that currency was not available for bids under $82, a move that narrowed the bid band further.

As always raw materials for industry dominated the main auction, with US$12,86 million of the US$32,48 million bid and allotted going on this item.

In the SME auction raw materials moved into second place with machinery and equipment taking the lead position with US$753 000 of the US$3,076 million bid and allotted.

Machinery and equipment were easily in second position on the main auction, with US$7,55 million, almost exactly 10 times as much as in the SME auction. On the main auction raw materials and machinery mopped up around two thirds of all bids and allotments.-herald.cl.zw