Interbank Rate reduces Alternative Market premium t0 60% as Authorities implement drastic measures to stem ZWL carnage

[Bulls n Bears]

 <http://www.netone.co.zw/> 

 

 

Dear Subscriber,

 

Please find herein the RBZ Foreign Currency Auction Market results &
Commentary for 10 May 2022. 

 

	
Auction Results 10 May 2022

Auction Results 03 May 2022

	
US$

US$

US$

US$


 

SME Auction

Main Auction

SME Auction

Main Auction


Value of Bids Accepted

4,132,275.84

23,020,941.86

4,579,271.64

24,070,457.63


Total Number of Bids Received

918

434

1,151

474


Number of Bids Disqualified

45

78

69

45


Total Number of Bids Accepted

873

356

1,082

429


Number of Bids Allotted

845

356

1,082

429


Amount Allotted

3,823,470.35

23,020,941.86

4,579,271.64

24,070,457.63


Highest Rate Received

240.0000

205.0000

240.0000

200.0000


Lowest Bid Rate Allotted

165.0000

166.0000

155.0000

155.0000

					

Weighted Average Rate

173.2685

4.20%

165.9942

100.00%


 

				

Purpose

SME Auction

Allotments

Main Auction

Allotments

SME Auction

Allotments

Main Auction

Allotments


 

USD

USD

USD

USD


Raw Materials 

943,388.28

10,669,395.02

1,206,244.02

11,325,102.37


Machinery & Equipment 

1,339,884.35

6,438,722.90

1,598,573.38

6,120,869.88


Consumables  

484,561.52

1,664,849.84

581,984.96

1,532,512.07


Pharmaceuticals & Chemicals

405,151.21

1,516,399.85

541,832.93

1,686,903.52


Services 

331,397.71

1,537,387.23

340,436.92

1,495,432.16


Retail & Distribution 

2,500.00

33,517.00

17,617.97

21973.6


Fuel, Electricity & Gas 

206,892.74

663,221.81

162,982.00

1,265,094.94


Paper & Packaging 

109,964.54

497,448.21

129,599.46

622,569.09


Total 

3,823,740.35

23,020,941.86

4,579,271.64

24,070,457.63


 

				

Grand Total Awarded

26,844,682.21

-6.30%

28,649,729.27

	
						
						

Harare- The Zimbabwe dollar weakened and broke through the psychological
ZWL170 barrier to ZWL173.2685 against the greenback, retreating by 4.20% on
the Dutch Auction market taking its YTD depreciation on the official market
to 54%. On the alternative market, the local currency was stable in the
ZWL385-ZWL405 band, a 54% YTD depreciation . The depreciation of the ZWL on
the Auction Market saw the premium of parallel market rate to official
market reducing to 134%. The Interbank market rate depreciated to
ZWL277.0262 with the Alternative market at a much lower 60% premium to it.

 

A concoction of policy measures have been announced including drastic ones
like banning lending of all forms, a scenario that was once introduced in
Ethiopia for 3 months in August 2021 to stem a similar decline in the local
currency.

 

Whatever views are out there on the appropriateness or effectiveness of the
measures, the obvious thing is that after the April inflation shocker and
ZWL collapse in the same month, Government through its various arms was not
going to just watch the carnage while on the side lines. Something hard had
to be done and that's where we are. 

 

Going forward, the hope is that we have only two official exchange rates to
eliminate arbitrage opportunities that breed rent seeking behaviour. A
stable exchange rate is critical for economic stability and growth.

 

 

  <mailto:bulls at bullszimbabwe.com> 

 

Invest Wisely!

 

Bulls n Bears 

 

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