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Zim$ edges towards stability on the RBZ Auction

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By Alois Vinga


THE value of the Zim$ appears to be swiftly edging towards settling on the Reserve Bank of Zimbabwe (RBZ) Foreign Exchange Auction after registering slow depreciation in recent weeks.

A trading update released at the close of business Tuesday shows that the official exchange rate moved slightly to settle at ZW$628,19: US$1 down from the figure of ZW$626,18:US$1 recorded last week.

Three weeks ago the exchange rate was at ZW$621,53: US$1 after having oscillated around ZW$600 for most of last month.

Market watchers speculate that the exchange rate could now be swiftly moving towards settling after almost moving towards equilibrium which has seen the parallel market rate gap almost closing.

Currently exchange rates on the alternative market are ranging around ZW$700 against the greenback but considering that the RBZ allows businesses to peg their prices at minus or plus 10% most companies can still peg their prices at ZW$690:US$1 which has a very slight difference from the black market rates.

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“Bids with outstanding Bills of Entry, insufficient Zim$ and those with sufficient Nostro balances were disqualified. Some of the bids were allotted on a pro-rata basis. Willing Buyer willing Seller as at October 6, 2022 was ZW$604,21: US$1,” the RBZ Auction trading update said in part.

Meanwhile allotments made were in favour of boosting productivity with US$9,7 million extended to companies on the main auction largely going towards raw materials at US$4,2 million, machinery and equipment, US$2,7 million, consumables US$587 974 and services US$1,4 million.

Retail and distribution received US$344 895 , services US$1,4 million, retail and distribution US$344 895, pharmaceuticals and chemicals US$220 895, paper and packaging US$48 662.

A similar trend was sustained on the SME platform where US$1,3 million was allotted towards the productivity spurring cause.