Zim-dollar weakens against US$ at forex auction
THE Zimbabwean dollar further weakened against the United States dollar at the weekly forex auction system on Tuesday where it traded at Z$116,7 to the green back.
The forex auction system resumed on 18 January 2022 with the exchange rate pegged at $112, 82 and last week on Tuesday the local dollar dropped value to $115, 4, which was 3,5 percentage decline since the reopening of the auction and 1,08 percent decline from the last week.
Since its introduction on June 2020, the official forex trading platform continues to play a critical role in supporting the productive sector to access forex resources – benefiting over 7 000 entities.
However, parallel market activity remains stubborn with its rate hovering at around US$1:Z$200 or more in some instances depending on demand.
In a latest, the Reserve Bank of Zimbabwe (RBZ) indicated that US$37,5 million was awarded as the grand total to the auction with US$30,8 million being allotted to the main auction and US$6,7 million allotted to the Small and Medium Enterprises (SMEs).
As has been the tradition, much of the forex was awarded towards the procurement of raw material with US$14,9 million being allotted to both the main auction and SMEs.
Other allotments were channelled to procurement of industrial machinery and equipment, consumables like spares and electricals, service like loans and education, retail and distribution like food and beverages, pharmaceuticals and paper and packaging.
At this week’s auction, 783 bids were accepted under the SMEs auction and 460 at the main auction.
The auction system was closed on 14 December 2021 for a festive break with the rate pegged at $108,7 against the United States Dollar.
Economic commentator, Mr Reginald Shoko, has said that the closure of the auction system has created a demand and supply gap for the forex dealers to distort the exchange rate as that gave an opportunity for people to look for forex from the black market.
“It must be noted that the closure of the forex auction meant that businesses were left sourcing forex from black market, which increased the volumes of transactions and the pre-eBusiness Weekly
