ZWL sees biggest one day depreciation on Auction Market as it closes gap on both Interbank and Alternative Market

Wed May 18 08:20:06 CAT 2022

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

Dear Subscriber,

Please find herein the RBZ Foreign Currency Auction Market results &
Commentary for 17 May 2022. 

Auction Results 17 May 2022

Auction Results 10 May 2022

US$

US$

US$

US$

SME Auction

Main Auction

SME Auction

Main Auction

Value of Bids Accepted

8,998,155.54

42,053,973.50

4,132,275.84

23,020,941.86

Total Number of Bids Received

1,068

433

918

434

Number of Bids Disqualified

53

26

45

78

Total Number of Bids Accepted

1,015

407

873

356

Number of Bids Allotted

135

50

845

356

Amount Allotted

1,240,118.58

5,604,709.04

3,823,470.35

23,020,941.86

Highest Rate Received

300.0000

299.0000

240.0000

205.0000

Lowest Bid Rate Allotted

220.0000

220.0000

165.0000

166.0000

Weighted Average Rate

258.5404

32.98%

173.2685

Purpose

SME Auction

Allotments

Main Auction

Allotments

SME Auction

Allotments

Main Auction

Allotments

USD

USD

USD

USD

Raw Materials 

399,298.05

3,162,049.14

943,388.28

10,669,395.02

Machinery & Equipment 

421,176.31

1,022,000.57

1,339,884.35

6,438,722.90

Consumables  

152,356.57

199,557.09

484,561.52

1,664,849.84

Pharmaceuticals & Chemicals

118,337.19

303,837.41

405,151.21

1,516,399.85

Services 

82,083.50

335,266.58

331,397.71

1,537,387.23

Retail & Distribution 

0.00

0.00

2,500.00

33,517.00

Fuel, Electricity & Gas 

66,866.96

50,000.00

206,892.74

663,221.81

Paper & Packaging 

0.00

531,998.25

109,964.54

497,448.21

Total 

1,240,118.58

5,604,709.04

3,823,740.35

23,020,941.86

Grand Total Awarded

6,844,827.62

-74.50%

26,844,682.21

Harare- The Zimbabwe dollar depreciated significantly meeting market
expectations that the Auction Rate will converge to Interbank Rate as
monetary authorities move in to eliminate multiple exchange rates. The local
unit weakened 33% against the greenback to ZWL258.5404 from ZWL173.2685,
taking its YTD depreciation on the official market to 56%. On the
alternative market, the local currency was stable in the ZWL405-ZWL415 band
with isolated quotes at ZWL420 and ZWL450, 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 59%. The Interbank market rate
depreciated to ZWL284.9378, a 10% premium to Interbank rate which is now
expected to converge very soon.

The depreciation was expected largely and there was no way we could continue
with such glaring arbitrage opportunities.

The market is keeping fingers crossed that the RBZ & Ministry of Finance
will keep this up until the rate reflects where willing sellers meet willing
buyers.

The previous rate levels were not sustainable for exporters, especially as
the nation wanted them to increase production and take advantage of the
record high global commodity prices.

We hope this time around, the authorities will not interfere excessively via
the crawling peg approach and might as well remove one of the exchange rates
and go with one.

Only time will tell as we have been here before but at least for now this is
a step in the right direction.

Meanwhile the bloodbath continues on the ZSE despite the lifting of the bank
lending suspension.

  <mailto:bulls at bullszimbabwe.com> 

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Bulls n Bears 

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