Dollar maintains momentum

Source: Dollar maintains momentum | Herald (Top Stories)

Business Reporter

The Zimbabwe dollar was virtually unchanged against the US dollar, although firming by a very marginal 0,01 percent to $82,08 from $82,09 to the greenback after yesterday’s central bank auction.

Industry’s demand for the hard currency remained high, with total US dollar allocations coming in at a total of US$35,3 million, the second highest on record and marginally lower than last week’s US$35,83 million, although that came after the three-week Christmas break.

As as been the case for months, all valid bids were successful with bidders operating in a very narrow band.

The solid demand for foreign currency by the country’s productive sectors, even in the midst of a Covid-19 necessitated 30-day lockdown, shows the productive sectors are still operating at high levels, with industry being the main user of foreign currency since this sector is not a net exporter.

Of the US$35,3 million allocated yesterday, the bigger corporations accounted for the bulk of allocations at US$32,4 million down slightly from US$33,02 million previously, and the SMEs segment accounted for US$2,87 million from US$2,81 million, and setting a new record of bids and allocations for this group and more move into the role of direct importers to source raw materials and spare parts.

The total number of bids on the auction platform rose to 517 from 512 previously. On the main auction, the total number of bidders stood at 289, while 228 bids were recorded on the SMEs auction.

The main platform saw 29 bids rejected and the SME platform just nine bids. Bids are rejected either because the required paperwork accounting for previous imports and exports is incomplete, or a bidder has neglected to spend their own nostro balances first, or because the currency is wanted to pay for goods or services not on the two priority lists.

The highest bid on the main auction was $86, while that for the SME section was marginally higher at $87. But the lowest bids on both the main auction and the SME auction were merged at $80.

As always, the priority policy means raw materials accounted for the bulk of allotments yesterday at US$14,8 million on the main auction and US$723 820 on the SMEs section. Machinery and equipment came in second with US$6,2 million on the main and US$527 444 on the SMEs section.

And consumables came in third on the main auction at US$1,6 million, but on the SMEs section, consumables took up US$681 830. Companies supplying spare parts and other consumables tend to be in the SME sector.

Official trade figures show that the country’s exporters are more than meeting the required currency inflows for the auctions.

Latest trade data from the Zimbabwe National Statistical Agency show that Zimbabwe’s exports grew from US$389 million in August 2020 when the rate basically reach stability, to US$398 million in September 2020 and then to US$439 million in October 2020. November 2020 saw exports go over half a billion dollars in a single month to reach US$528 million.

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