Zimbabwe: Zim$ depreciates by 6% on the RBZ Foreign Exchange Auction

THE Zim$ value has depreciated by 5, 8% against the greenback on the Reserve Bank of Zimbabwe (RBZ) Foreign Exchange Auction.

Market watchers believe the development is a positive step which is slowly moving to close the gap set by the parallel market rate.

A trading update released at the close of the business shows that the official exchange rate at the close of business was US$1: ZW$521, 34 up from US$1: ZW$494,98 recorded last week to signify a 5,8% decrease.

Market watchers contend that this week’s depreciation is a positive development, which goes a long way to close the gap created by the parallel market premium and in the process achieve exchange rate equilibrium.

The parallel market rates currently stand at around US$1: ZW$800, prompting concerns by industry players for the gap between the two exchange rates to be closed in order to attain acceptability of the local currency.

The trading update shows that allotments on the Main Auction sustained a productivity spurring priority, with raw materials being allotted US$7,3 million, machinery and equipment US$3,4 million, consumables US$1,3 million, services US$1,7 million, retail and distribution US$806 626, pharmaceuticals and chemicals US$199 333, paper and packaging US$304 084.

The total allotted on the platform was US$15,1 million.

A similar trend was followed on the SMEs Auction, where 415 bids were accepted,  with raw materials , machinery and equipment remaining on top priority.