By Staff Writer
The local currency left this week’s foreign currency auction held on the 23rd of March 2021, ZW$0.1367 cents weaker against the greenback than its value held at last week’s auction. This week a single unit of the United States currency will trade for ZW$84.12 whilst last week’s auction saw it trade for ZW$83.98 following another depreciation.
The total number of bids accepted this week were 507 from total bids of 631, resulting in 124 bids being rejected for various reasons. The total amount allotted remained flat as it increased by US$0.3 million to settle at US$35.6 million from US$35.3 million allotted in last week’s auction. The lowest rate allotted remained at ZW$82 for US$1 evidencing the consistent demand for the greenback within the Zimbabwean economy.
With a country that imports virtually everything, it comes as no surprise as Raw Materials got US$13.55 million, Machinery and Equipment was allotted US$8.35 million. Fuel and Gas and Energy was given US$2.97 million as Retail and Distribution got allotted US$2.29 million.
Services which include divestments, school fees and repatriations got US$2 million as Pharmaceuticals and Consumables got allotted US$2.75 million and US$3.4 million respectively. Lastly it was Paper and Packaging which got $0.42 million.
Reserve money, which refers to currency in circulation plus commercial banks deposits with the central bank, declined 8.9% to ZW$18.72 billion as at week ending 12 March 2021 from ZW$20.55 billion in the previous week, the central bank has said.
This was largely due to a decrease of ZW$1.91 billion in banks’ liquidity, according to the Reserve Bank of Zimbabwe (RBZ).
Currency in circulation also declined by ZW$24.06 million.
“Government deposits at the Reserve Bank increased by ZW$3.08 billion, as companies began preparing for the March 2021 quarterly tax payments. This has the effect of withdrawing liquidity from the market,” stated RBZ.
Partially offsetting the decrease in reserve money was an increase of ZW$116.83 million in banks’ required reserves. – Harare