- Initial Appreciation: Appreciated to 27.99 on November 4, up from 28.68 on November 1
- This marked a notable shift after a 4% decline at the start of the month
- Widening Premium: Premium has widened to 61%, approaching levels seen prior to recent 43% devaluation
- Parallel Market Dynamics: PMR surged from 30-35 per dollar before the devaluation to a range of 45-50 by late October
Harare- After a dismal start to the month, the ZiG has appreciated for the first time in a while, according to the latest data released by the Central Bank.
The currency strengthened to 27.99 on November 4 from 28.68 on November 1, following a 4% week-on-week decline at the start of the month.
However, this appreciation contrasts sharply with the performance of the currency in the parallel market, which is predominantly driven by market forces and utilized by producers and other businesses alike.
With the latest appreciation in the formal market, the premium has widened to 61%, edging closer to the levels leading to the recent devaluation.
Prior to the 43% devaluation in late September, the parallel market rate (PMR) fluctuated between 30 and 35 per dollar, while the official rate stood at 13.9.
Following the devaluation, the PMR surged, peaking between 35 and 40 in October, and escalating further to a range of 45-50 by late October, with peer-to-peer transactions reaching 40 per dollar.
The theoretical appreciation of the local currency against the US dollar suggests an increased demand for ZiG; however, this notion lacks practical validity.
The widening premium in a free market indicates a rising demand for US dollars, highlighting ongoing currency pressures.
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