- ZW$ traded at 546.8 from 521.3 last week
- The highest rate received spiked to ZW$605 against the US$
- Poor governance continues to haunt the local currency
Harare- The local currency traded on the back foot during the latest RBZ-governed auction market held on Tuesday against the much preferred United States dollar. The Zimbabwe dollar shed by 5% to 546.8254 against the United States dollar, another 5% decline buttressing its prior week's record loss for August.
Due to lower liquidity of foreign currency reserves, the grand total awarded declined by circa US$3 million from US$18 million last week to US$15.3 million this week. Earlier this year, President Mnangagwa alluded that the foreign currency auction market will only accept bids for the forex available in RBZ coffers. However, even though the amount bided decelerated, RBZ is still failing to allot the funds on time.
The highest rate received against the US dollar was ZW$605 from ZW$580 last week while the lowest rate spiked to ZW$520 from ZW$485 last week against the single greenback. This reflected the hunger for the US dollar by companies and their appetite to dispose the excess Zimbabwe dollar which the government is battling to resuscitate.
Zimbabwe’s main problem which is straining the foreign currency availability is lack of productivity. The country imports more than it exports, meaning the hunger for forex will continue climbing the bar.
Reduction in production is caused by a lack of meaningful investments in the country due to corruption, mismanagement of funds and lack of the rule of law. That has caused the bodies such as Zimbabwe Electricity Supply Authority (ZESA) to struggle to service its debts and replace the old power plants at Hwange Thermal Power station and have a long-lasting solution to Kariba Power Station’s recurrent technical faults.
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