Zim dollar slumps against USD in third straight week

Zim dollar slumps against USD in third straight week
Us dollar, ZimDollar Notes

Harare, July 07, 2020 (New Ziana) – The Zimbabwean dollar lost ground again against the greenback at Tuesday’s auction, the third consecutive week it has slid since it was allowed to freely float.

It depreciated three percent to $65.87 to the US dollar in Tuesday’s trade, which was marginal compared to 50 percent and 11 percent in the first and second weeks respectively of its free float.

The government freely floated the local currency, previously fixed at $25 to the greenback three weeks ago, in a move lauded by exporters which monetary authorities had expected to choke the flourishing parallel market.

At the first auction, the local currency lost more than 50 percent of its value, trading at $53.36, and depreciated by a further 11 percent to $63.74 last week.

Re-introduction of the weekly auctions has breathed life into the formal market and also forced a drop in the foreign currency parallel market rate, which once topped $100, to around $93.

In Tuesday’s auction, the highest bid was $90 per dollar while the lowest accepted bid was $55.

A total of 264 bids, amounting to US$15.87 million were received while 139 bids, which amounted to US$13.6 million were allotted.
About 92 bids were rejected for various reasons while 33 bids were not allotted.

Eight other sectors including energy, mining, pharmaceuticals and agcirulture got the remainder of the funds.

The manufacturing sector, at US$5.6 million took the lion’s share of the allocations followed by retail and distribution at US$1.936 million and services at US$1.86 million.

The central bank has said it is using a priority list to allocate available foreign currency.

Those wishing to buy hard currency on the auction are expected to present one bid per auction of a minimum of US$50 000 and maximum of US$500 000.
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