RBZ Foreign Exchange Auction Results and July Inflation Update

Tue Jul 27 22:20:34 CAT 2021

 <mailto:info at bulls.co.zw> 

Dear Subscriber,

Please find herein the RBZ Foreign Currency Auction Market results &
Commentary for 27 July 2021. 

Auction Results 13 July 2021

Auction Results 06 July 2021

SME Auction

Main Auction

SME Auction

Main Auction

Value of Bids Accepted (USD)

9,933,403.94

37,242,121.28

8,733,042.62

37,295,634.31

Highest Rate (ZWL)

92.0000

91.0000

90.0000

90.0000

Lowest Rate (ZWL)

82.0000

82.0000

82.0000

82.0000

82.0000

82.0000

82.0000

82.0000

Amount Allotted (USD)

9,933,403.94

37,242,121.28

8,733,042.62

37,295,634.31

Number of Bids received

682

394

588

402

Number of Bids rejected

56

38

44

32

Weighted Average Rate (ZWL)

85.6402

0.0034%

85.6373

Purpose

SME Auction

Allotments

Main Auction

Allotments

SME Auction

Allotments

Main Auction

Allotments

USD

USD

USD

USD

Raw Materials 

2,618,337.54

14,262,215.75

2,027,591.73

15,100,167.36

Machinery & Equipment 

2,571,114.31

8,981,866.50

2,014,127.79

9,539,708.98

Consumables  

1,848,155.35

1,896,941.25

1,984,305.33

3,104,800.09

Pharmaceuticals & Chemicals

711,992.69

2,137,154.25

606,061.45

911,998.04

Services 

862,967.10

4,332,677.09

968,244.79

3,713,743.57

Retail & Distribution 

286,143.71

1,987,585.65

278,492.74

1,748,127.88

Fuel, Electricity & Gas 

732,787.66

2,900,273.71

563,690.77

2,449,332.18

Paper & Packaging 

301,905.58

743,407.07

290,528.02

727,756.21

Total 

9,933,403.94

37,242,121.27

8,733,042.62

37,295,634.31

Grand Total Awarded

47,175,525.21

2.49%

46,028,676.93

 <mailto:info at bulls.co.zw> Harare-The Zimbabwe Dollar was flat versus the
greenback on the auction market as the allotted bids inched up 2.49% at
US$49.2m vs US$46.0m in the prior week. 

The alternative market saw the ZWL stable at ZWL135 exchange rate but still
range bound from ZWL130 for small transactions to as high ZWL140 for large
transactions . 

The gap between interbank and alternative market dislocated in the run up to
the auction with alternative market spiking to as high as ZWL145 for volume
transactions after having spent nearly 3 weeks at ZWL140 thus widening the
premium to nearly 70%. Such premiums normally lead to collapse of auction
markets as the normal premium for frontier markets is expect to be having a
high of 25%.

As such we expect the RBZ and or the Ministry of Finance to drastically
improve the efficacy of the auction market through double actions of
curtailing money supply growth, increase FX supply to the market from
Government reserves and speed up settlement of allotments. 

If not checked, this will undo the progress registered on the inflation
front.

Zimbabwe's Y/Y inflation breaks into the double digit zone in July

The month on month inflation rate for July was 2.56% shedding 1.32
percentage points on the JUne rate of 3.83%.

The year on year inflation rate (annual percentage change) for the month of
July 2021 as measured by the all items Consumer Price Index stood at 56.37%.
This compares favourably with the June Y/Y inflation rate of 106.6% and it's
the first time since May 2019 that the rate is in the double digit zone
following a spiral into hyperinflation beginning December 2018.

Invest Wisely!

Bulls n Bears 

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