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Zim dollar continues to lose value

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The Zimbabwean dollar continues to lose its value after shedding off with 0,01 against the US dollar on the Reserve Bank of Zimbabwe (RBZ) foreign currency (forex) auction conducted Tuesday.

Last week the weighted average was US$1: ZWL$85.6372, falling to US$1: ZWL$85.6402 this week.

However, this is not a true reflection of the market forces.

The black market rates are ranging between 1:140-155.

Economists believe the parallel market is always there to sabotage government efforts however the reality on the ground is where the majority get their forex is where the actual rate is.For the general person frex is on the black market but for the big companies over 90 % of them are accessing forex on the foreign currency auction.

This week, US$10 million was allocated to the Small to Medium Enterprises forex auction while US$37 million was allocated to the main forex auction.

In total, US$47 million was allotted this week, with the bulk of the allotment going to raw materials followed by machinery and equipment.

682 bids were received on the Small to Medium enterprises forex auction, with 626 accepted and 56 disqualified.

On the main forex auction, a total of 394 bids were received, 356 were accepted while 38 were disqualified.

The Reserve Bank of Zimbabwe (RBZ) said bids that were disqualified were not eligible in terms of the Priority List.

Bids with overdue CDIs, outstanding Bills of Entry (BOEs), and those with sufficient FCA balances were also disqualified.

Some bids were allotted on a pro-rata basis to conform with the Import Priority List, the RBZ said. Below is the RBZ summary of the forex auction:

Number of Bids Received : SME

682

Main

394

Number of Bids Disqualified : 56 38
Total Number of Bids Accepted : 626 356
Total Number of Bids Allotted : 626 356
Total Value of Bids Accepted : USD9,933,403.94 USD37,242,121.28
Amount Allotted : USD9,933,403.94 USD37,242,121.28
Highest Rate Received : 92.0000 91.0000
Lowest Bid Rate Received : 82.0000 82.0000
Lowest Bid Rate Allotted : 82.0000 82.0000
Weighted Average Rate : 85.6402
PURPOSE AMOUNT ALLOTTED SME AUCTION AMOUNT ALLOTTED MAIN AUCTION
Raw Materials 2,618,337.54 14,262,215.75
Machinery and Equipment 2,571,114.31 8,981,866.50
Consumables (Incl. Spares, Tyres, Electricals, etc) 1,848,155.35 1,896,941.25
Services (Loans, Education, Dividends, Disinvestments, etc) 711,992.69 2,137,154.25
Retail and Distribution (Incl. Food, Beverages, etc) 862,967.10 4,332,677.09
Fuel, Electricity and Gas 286,143.71 1,987,585.65
Pharmaceuticals and Chemicals 732,787.66 2,900,273.71
Paper and Packaging 301,905.58 743,407.07
TOTAL 9,933,403.94 37,242,121.28
GRAND TOTAL AWARDED 47,175,525.22

Only time will tell however as long as the average person can put food on the table whatever happens with the greenback is not an issue and as long as the big companie’s can access forex to trade then indeed John Panonetsa Mangudya is faring well and stabilising the economy with the success story of the forex auction ongoing.

Ross Moyo

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