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Zimdollar continues to trade within range of cash parallel rates

by Staff reporter
06 Oct 2020 at 20:22hrs | Views
The local currency added a marginal 0.11715% after it firmed up against the dollar in the latest auction as it continues to reposition itself in the world of currencies based on supply and demand. The ZWL now trades at 81.3486 against the dollar from 81.4439 attained last week.

This week the highest allotted bid rate was 87.00, increasing from last week's 86.00 and the lowest rate for the main auction came in at 79.00 which was up from 78.00 last week thereby narrowing the spread between bids to 10.13% from 10.26% last week.
A total of US$26m was apportioned to both the main auction at US$24.69m and SMEs US$1.4m after a combined 307 bids were accepted from a total 363 bids.  A total $288.72 million has been made available on the auction since inception. The Reserve Bank of Zimbabwe said that 51% of the proceeds are from exporters retention and 49% from other sources including Government and RBZ.
The parallel market and the average weighted rates continue to diverge despite the parallel market rate coming down two weeks ago. The difference between the two rates is now at 22.53%. The parallel market rate is now more of a sentimental and expectation rate rather than a show of demand but its stability at a certain range supports the dollarisation argument rather than price stability. The difference between the highest bid and the lowest bid continues to fall moving in a linear direction with the average weighted rate and highest bid rate difference.

Raw materials got US$8.15m as they continued to dominate the allocations of the auction. Machinery and Equipment was allotted US$5.12m as companies continue to beef up their capital expenditure, Consumables received US$3.58m. Fuel, Electricity and Gas US$2.21m and Services US$2.65m was the last category to receive over two million dollars. Pharmaceuticals and Chemicals and Retail and distribution, were among other sectors to be allotted funds through the auction system today.
The cash parallel market rate like other parallel market rates has remained stagnant for eight weeks now at between 80-82. The Zipit rate also remained stuck at 110 for large amounts. Mobile money rates were quoted at 96-98, while Zipit lower amounts are currently trading at 100-102 per US$100.  
The improving health of President Trump has resulted in the fall of alternative investment assets and the crypto world has also been affected. Cryptocurrencies were mostly down in the day but closed on a mixed note. Bitcoin was down 0.66% to $10 893 with Bitcoin Cash losing 0.69% the most in the day to $236.04. Ethereum was the sole gainer in the day after it was up 0.17% to $373.22.

Source - finx