ZWL collapses on alternative market as depreciation rises to 26% on Auction market

[Bulls n Bears]

               <mailto:info at bulls.co.zw> 

 

 

Dear Subscriber,

 

Please find herein the RBZ Foreign Currency Auction Market results &
Commentary for 29 March 2022. 

 

	
Auction Results 29 March 2022

Auction Results 22 March 2022

	
US$

US$

US$

US$


 

SME Auction

Main Auction

SME Auction

Main Auction


Value of Bids Accepted

6,552,957.64

31,907,210.04

6,726,743.14

31,001,078.43


Total Number of Bids Received

1,159

449

1,102

450


Number of Bids Disqualified

74

36

91

37


Total Number of Bids Accepted

1,085

413

1,011

413


Number of Bids Allotted

1,080

399

977

399


Amount Allotted

6,548,579.22

31,062,799.46

6,625,160.56

30,182,270.46


Highest Rate Received

155.0000

155.0000

150.0000

150.0000


Lowest Bid Rate Allotted

134.0000

138.0000

131.0000

134.0000

					

Weighted Average Rate

142.4237

2.9671%

138.1979

	

 

				

Purpose

SME Auction

Allotments

Main Auction

Allotments

SME Auction

Allotments

Main Auction

Allotments


 

USD

USD

USD

USD


Raw Materials 

1,615,444.30

12,925,745.35

1,530,260.33

12,202,419.26


Machinery & Equipment 

2,360,898.79

7,733,877.71

2,341,914.46

7,377,814.72


Consumables  

978,058.20

2,750,273.25

1,009,904.53

2,263,608.77


Pharmaceuticals & Chemicals

575,063.56

2,462,416.33

554,119.87

2,334,215.44


Services 

654,488.81

2,474,066.14

724,837.25

3,565,969.42


Retail & Distribution 

16,436.96

263,817.96

44,593.65

0.00


Fuel, Electricity & Gas 

232,066.98

1,623,231.17

278,587.70

1,410,974.56


Paper & Packaging 

116,121.62

829,371.55

140,942.87

1,027,268.29


Total 

6,548,579.22

31,062,799.46

6,625,160.66

30,182,270.46


 

				

Grand Total Awarded

37,611,378.68

2.18%

36,807,431.12

	
						
						

Harare- The Zimbabwe dollar has continued to weaken against the greenback,
retreating by 3% today on the Dutch Auction market to ZWL142.4237 taking its
YTD depreciation on the official market to 26%. On the alternative market,
the local currency has deteriorated in the past week from an average of
ZWL240 to a high of ZWL280, a 29% depreciation placing the premium to
official market at 97%. The invisible hand is the major reason for that move
but what is clear is that the alternative market adversely moved in the past
week and may not slow down.

 

There are fears of resurgent inflationary prices and further exchange rate
dislocation. The IMF article consultation recommended further monetary
tightening, given the persistently high inflation. In this context, they
also emphasized the need to increase the operational independence of the
central bank, discontinue its quasi-fiscal operations, and improve its
coordination with the fiscal authorities. Furthermore it recommended that
concerted efforts be applied toward greater exchange rate flexibility by
allowing a more transparent and market-driven price process. IMF Directors
also called on the authorities to phase out exchange restrictions and
multiple currency practices as soon as conditions permit. Fiscal and
Monetary authorities have been working hard to encourage use of the local
currency but deficient confidence has meant that USDs remain out of
circulation. Furthermore, inadequate supply of currency on Auction market
has seen pressure piling on the alternative market.

 

Investors are encouraged to continue investing in hedging assets such as
ZSE, equity linked funds managed by asset managers.

 

 

Invest Wisely!

 

Bulls n Bears 

 

Cellphone:        +27 71 5444 769

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