- The Zimbabwe dollar shed by 4% on the latest Auction Market
- Since the introduction of the Auction Market, deficits have widened by 93%
- In the outlook, the Zimbabwe dollar is expected to continue experiencing record falls against the US dollar
The graph below shows ZWL perfomance against USD on the 8th of Feb 2023
Harare- The Underfired Zimbabwe dollar has shed by 93% on the Foreign Exchange Auction Market since it commenced in June 2020. The Zimbabwe dollar traded at ZWL831.8147 on the latest auction market held on the 7th of February 2023, from ZWL801.6023.
Week-to-date deficits have widened by 4% same as month-to-date deficits while since January 2023, the Zimbabwe dollar has succumbed by 15% against the greenback, which is a month-on-month record decline since the Zimbabwe dollar was introduced in 2019.
With bank policy rates slashed by 50 percentage points from 200% to 150% by the Central Bank during the latest presentation of the Monetary Policy Statement, borrowing activities from both the private and public sectors are expected to rise compared to the prior quarters, thus, adding more worthless-Zimbabwe dollar liquidity into the market against the few US dollars.
In this regard, the Zimbabwe dollar is expected to experience record falls in the outlook due to high consumer activities and more corporate borrowings.
As elections are closer, the government soon will be availing funds for its suppliers, increasing salaries for the security personnel which plays a fundamental role in ZANU PF elections through quashing and silencing opposition voices courtesy of the Maintenance of Peace and Order Act.
The Zimbabwe dollar is expected to continue falling in the short term as investors will seek to hedge their assets with the United States dollar.
Between August 2017 and August 2018, the elections period, Central Bank increased broad money by a whopping 41% resulting in a hyperinflationary environment. It was the same in the 2013 elections and 2008 elections.
Meanwhile, the highest rate received was ZWL890 against a single greenback up from ZWL860 last week while the lowest rate received was ZWL830 up from ZWL800 last week. The continued uprise in highest bids and lowest bids resembles the loss of confidence that the business community have in John Mangudya’s currency.
The grand total awarded grew to US$19 million from ZWL18 million last week. The demand for the US dollar is expected to continue soaring as the ZWL liquidity is likely to rise in the near future.
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