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Zim$ Remains Weakened But Stable at $84.65 Against US$1 – Mangudya

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By July this year, all the 12 monthly jumps in the annual inflation calculation will be from the low months, hence the prediction of 55 percent.The MPC also reaffirmed its strong commitment to continue with the conservative monetary policy stance to ensure that the current price stability was maintained.

 

According to The Reserve Bank of Zimbabwe (RBZ) Governor John Panonetsa Mangudya, yesterday’s 18 May 2021 foreign exchange auction shows that the Zimbabwe dollar remained weakened though stable against the United States Dollar (USD) amid increased demand for the greenback following the reopening of the economy after putting it under a COVID-19-induced lockdown.

The Governor said ”Results from the Tuesday, 18 May 2021 RBZ forex auction show that the weighted average fell slightly from US$1:ZWL$84.6140 last week to US$1: 84.6494 this week.”

This week US$6.2 million was allocated to the Small to Medium Enterprises forex auction while US$36.4 million was allocated to the main forex auction.

In total, US$43 million was allotted this week, with the bulk of the allotment going to raw materials followed by machinery and equipment.

445 bids were received on the Small to Medium enterprises forex auction, with 401 accepted and 44 disqualified.

On the main forex auction, a total of 370 bids were received, 330 were accepted while 40 were disqualified.

Mangudya said ”bids that were disqualified were not eligible in terms of the Priority List.”

Governor Mangudya continued that ”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 boss said.

PURPOSE AMOUNT ALLOTTED SME AUCTION AMOUNT ALLOTTED MAIN AUCTION
Raw Materials 1,435,735.01 14,096,917.34
Machinery and Equipment 1,374,209.84 6,645,605.09
Consumables (Incl. Spares, Tyres, Electricals, etc) 1,292,674.62 3,275,512.08
Services (Loans, Education, Dividends, Disinvestments, etc) 499,484.30 3,813,997.19
Retail and Distribution (Incl. Food, Beverages, etc) 571,009.09 3,418,523.43
Fuel, Electricity and Gas 237,187.42 1,297,258.26
Pharmaceuticals and Chemicals 432,355.91 2,798,134.81
Paper and Packaging 324,877.00 1,015,016.73
TOTAL 6,167,533.19 36,360,964.93
GRAND TOTAL AWARDED 42,528,498.12

Meanwhile The Reserve Bank of Zimbabwe (RBZ) says the Foreign Exchange Auction System, which was introduced by the Bank on 23 June 2020 has been successful in achieving price stability in the national economy.

Speaking regarding the system to TechnoMag, RBZ Governor John Mangudya said ”success has been achieved through market price discovery of the exchange rate and provision of a dependable foreign exchange market.”

He said ”since inception of this auction system, there has been a significant increase in both the number of bids and the value thereof from just under 100 bids valued at US$11 million at the first auction to over 500 bids valued at around US$40 million at both the Main and SME auctions in March.”

Ross Moyo

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