ZW$ virtually unmoved in latest forex auction

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  • Rate stands at 1US$: ZW$82.09
  • US$35,4 million allotted in the latest auction
  • Some funds secured with the consequence of increasing money supply to a new peak level

The Zimbabwean dollar came out virtually unchanged in the most recent foreign currency auction held on the 19th of January 2020 with the weighed average rate moving only by 0,01 cents from ZW$82.09 to ZW$82.08 per united states dollar.

The auction held on the 19th of January 2021 was in itself somewhat a mirror of the one held in the prior week on the 12th of January 2021.

The latest auction saw a total of US$35,4 million allotted compared to of US$35,8 million in the prior auction while the total number of bids received decreased by 16 from 305 in the prior auction to 289 in the auction under review.

The sustained allotted amounts at this week’s auction come on the back of the strenuous efforts by the Reserve Bank of Zimbabwe (RBZ) in the week ended 8 January 2021 to purchase foreign exchange from the market with the aim of funding the foreign currency auction.

This move however saw money supply in the Zimbabwean economy reaching a new peak level after rising by ZW$2 billion in the week following an increase of ZW$1.69 billion in banks’ liquidity at the Reserve Bank (RTGS balances), coupled with increases of ZW$174.05 million and ZW$134.06 million in currency issued and required reserves, respectively.

The foreign currency auction which has been pivotal in taming Zimbabwe’s runaway exchange rate is also expected to remain funded by the new policy adjustment by the RBZ to retain 40% of exporters foreign currency earnings up from the previously required 30% and also by the anticipated rise in commodity prices of which pry products are the back bone of Zimbabwe’s foreign currency generation contributing over 80% of much needed foreign funds.

Equity Axis News.

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