Zim dollar down 6.3% to $76.76
Harare,(New Ziana) – The Zimbabwe dollar depreciated 6.3 percent against the greenback at Tuesday’s weekly trade to settle at $76.76, the sixth straight decline since it was floated.
The government unpegged the local currency, which was fixed at $25 to the US dollar, towards the end of June.
An auction system at which bidders and sellers of foreign currency meet to decide the weekly rate was introduced, in a move lauded by market watchers and exporters.
At the first auction, the Zimbabwe dollar traded at $53.36 to the US dollar, and has seen its value continue depreciating since then.
Last week it traded at $72.15.
According to Tuesday’s auction results released by the Reserve Bank of Zimbabwe (RBZ), the highest rate on offer was $82 while the lowest accepted at $75.
Total bids, at 228, amounted to US$19.3 million while US$14.36 million was allotted.
At least 55 bids were disqualified.
The central bank said about US$7.7 million was allocated towards purchase of raw materials while US$23 million went to acquisition of machinery and equipment.
Retail and distribution, consumables, pharmaceuticals and chemicals, services, paper and packaging, fuel, electricity and gas were sectors that got the remainder of the allocation.
While the auction system has breathed life into the formal sector, guaranteeing a steady supply of foreign currency for critical sectors, the official rate is still trailing the parallel market which is trading at no less than $90.