The local currency continued to gain against the dollar as it was up 0.75% in the latest auction as bidders continue to get all the money they bid at their various rates.
The ZWL’s latest gain will see it trade at 82.6993 this week against the dollar from 83.3209 last week.
RBZ governor John Mangudya said he was pleased with the trajectory and that the objective was to push for price and financial stability. “The next five or so auctions will be key as part of our objectives to hold money constant. But we are quite please with the modicum of stability achieved so far where prices are sticky downwards.”
This week the highest bid rate was 88, gaining on last week’s 87.50 and the lowest rate for the main auction coming in at 75, which was lower than the 76 of last week thereby widening the spread between bids to 20.55% from 15.13% last week.
A total of US$19.21mln, the highest amount allotted to date, was apportioned to both the Main Auction (US$18.33m) and SMEs (US$0.88m) at the recent auction after a combined 290 bids were accepted and 46 were rejected.
Highest allotted bid was 88, with the lowest allotted being 73. While there are reports of delayed settlement at select banks, this is largely administrative and back office functionalities and does not result in any loss of value to the customers. The auction system is operating on a T+1 settlement cycle for domestic transactions and T +2 for foreign transactions.
The difference in the average weighted rate and the highest bid widened again this week as it came in at 6.02% from 4.78% of the previous auction. Likewise, the difference between the parallel market rate and the weighted average rate has increased for a second week running as the former continued to trade lower. The difference between the two stands at 28.09% up 0.54 percentage points from 27.55% last week.
Raw materials continued to receive the highest allocation after it got US$8.96 mln, Consumables US$2.51 mln, Retail and Distribution US$1.312 mln, Machinery and Equipment US$3.55 mln and Services at US$1.66 mln. Other amounts below US$1 mln were allotted to Pharmaceuticals and Chemicals, LPG Gas, Paper and Packaging and Fuel and Electricity. –Financial Express.