By Alois Vinga
THE Zim$ depreciated by 2,8% on the Reserve Bank of Zimbabwe (RBZ) Foreign Exchange Auction platform, slowly moving closer towards the parallel market exchange rate.
A trading update released at the close of business Tuesday shows that the official exchange rate depreciated to US$1: ZW$801,60 down from a rate of US$1: ZW$779,31 signifying a 2,8% decline from last week’s exchange rate.
The movement is slowly edging closer to the parallel market exchange rate where US$1 is trading between ZW$900 to a high of ZW$1,000 in some instances which is however not easily accessible for citizens in the common markets.
On the Main Auction platform, a total US$16,4 million was allotted with raw materials getting US$9 million, machinery and equipment US$2,2 million, consumables US$814 010, services US$1,4 million, retail and distribution US$1,6 million, pharmaceuticals and chemicals US$508 381, paper and packaging US$796 465.
A similar trend was sustained on the SME Auction where the total value of bids accepted stood at US$2,8 million.
Analysing the trends on the Foreign Exchange Auction platform, economist Persistence Gwanyanya said the demand for foreign currency has increased since the kick off of the new year largely reflecting the effect of widening gap between the interbank rate and parallel market rate and increased demand for foreign currency which is solely responsible for the Zim$ depreciation.
“As the Zim$ is depreciating on the official, it’s firming up on the parallel market which is expected to reduce the gap between the two market rates. Going forward, the RBZ’s MPC is expected to reinforce measures to stabilise the ZW$ in their next meeting scheduled for next week,” he said.