- Zimbabwe dollar plunged to ZWL856.8 from ZWL705 in January
- Week to date losses widened by 3%
- Since June 2020, the currency has shed by 93%
Harare- Under-fired currency, the Zimbabwe dollar has widened year-to-date losses by 18% since the Foreign Exchange Auction Market commenced ON THE 10th of January 2023. On the latest Auction Market held on the 14th of February 2023, the Zimbabwe dollar shed 3% against the greenback to ZWL856.8403 from ZWL831.8147 in the previous Auction Market.
Since the Auction Market commenced in June 2020, the Zimbabwe dollar has depreciated by 93% while since the Zimbabwe dollar was re-introduced in 2019, the local currency has shed by 100% against the single greenback.
Among other factors, the Zimbabwe dollar continues to succumb to blackouts, reactionary fiscal policies and policy inconsistencies by the RBZ. Most of the measures being passed by both the Central Bank and the Treasury tends to backfire instead of meeting expectations.
For instance, the latest 50 percentage basis points cut is likely to increase the ZWL liquidity through increased borrowings thus, putting pressure on the Zimbabwe dollar.
Meanwhile, the highest rate received for the US Dollar was ZWL930 while the lowest was ZWL855 both up from ZWL890 and ZWL830 during the prior trading session. This signals how companies want to get rid of the Zimbabwe dollar ahead of the upcoming general elections.
From US$19 million allotted last week, US$20 million was allotted, translating to a circa US$1 million increase. Pressure for the greenback continues to mount for importing companies despite the latest revision of the export retention thresholds from 60% to 75%. This attests to the perspective that the Central Bank needs to at least increase them to 90% or COMPLETELY remove them to release pressure on Auction Market.
The Zimbabwe dollar is expected to continue dipping due to recurrent electricity blackouts, widening trade deficit and reactionary-half-baked economic policies ahead of the 2023 Presidential elections.
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