Zim$ depreciates by 14% on the RBZ Auction in last four weeks

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By Alois Vinga

THE Zim$ has depreciated by 13,5% in the last four weeks on the Reserve Bank of Zimbabwe (RBZ) Foreign Exchange Auction in a development which market watchers have described as “not alarming” since the official market is swiftly closing the alternative market rates.

A perusal of the RBZ Auction trading updates dating back to January 17 2023 shows that the official exchange rate then was at US$1: ZW$732 which as of this week had deteriorated to US$1: ZW$831,60 signifying a 13,5% depreciation.

Market watchers however believe that the movement will not trigger any market shocks since it is coming at a time when parallel market rates have remained stable since December 2022, trading at a premium of US$1: ZW$900 for common transactions but reaching as much as US$1:ZW$ 1 100 in some retail outlets.

This week’s auction results show that allotments towards bidders remained tilted in favor of supporting industrial productivity.

On the Main Auction platform, 215 bids were received with a value of US$20,2 million out of which raw materials received US$9,2 million, machinery and equipment US$1,9 million, consumables US$967 33, services US$1,3 million, retail and distribution US$2,3 million, pharmaceuticals and chemicals US$457 478, paper and packaging US$615 144.

A similar trend was observed on the SME Auction where 301 bids were received with a total value of US$27 million.

A grand total of US$19,1 million was allotted on both platforms with bidding rates reaching a high of ZW$890 and a low of ZW$830.