Zim$ records 0, 41% decline as RBZ vows to sustain exchange rate stability – NewZimbabwe.com

By Alois Vinga

THE Zim$ value slightly declined by 0, 41% amid a commitment by the Reserve Bank of Zimbabwe (RBZ) to sustain the obtaining exchange rate stability.

The local currency has been slowly depreciating on the RBZ Foreign Exchange Auction since June 2022 on the back of spiralling inflationary levels, which have been, however, contained through a raft of policy measures.

A trading update released at the close of business Tuesday shows the official exchange rate moved to ZW$ ZW$632,13: US$1 down from ZW$ 629, 52: US$1 reached last week signifying a 0, 41%.

At the current depreciation levels, market analysts still believe the levels of depreciation are not harmful to the economy considering that they are coming at a time when the parallel market rate has remained stable at a widely acceptable rate of US$1:ZW$700.

Allotments were skewed in favour of spurring economic productivity with 61 bids being received on the Main Auction out of which raw materials were allotted US$3 889 914, machinery and equipment US$1 897 733, consumables US$699 345, services US$1 819 614, 32, retail, distribution and services US$788 934, pharmaceuticals and chemicals US$357 099, paper and packaging US$49 646.

A similar trend was visible on the SME Auction, where raw materials were allotted US$299 771, 42, machinery and equipment US$378 986, consumables US$80 36 and services US$118 565 among other key priorities.

A grand total of US$11, 7 million was allotted on both the two platforms.

This comes shortly after the RBZ governor, John Mangudya, while addressing parliamentarians during the 2023 National Budget Seminar recently, dispelled social media reports predicting that the current exchange rate stability would only hold in the short term.

“I have read some claims that obtaining stability is temporary. No. It is here to stay and will spill over into the following year.

“We also anticipate a sustained movement towards convergence and that the current gap between the official and parallel market rates is in line with the internationally accepted 15% threshold,” he said.