Zimbabwe dollar ends the year on a promising note

The Zimbabwe dollar ended the year on a promising note as it remained stable against the United States dollar averaging $108.6660 compared to last week’s $108.6678.

More than 1 000 bids were allotted a total of US$41.8 million with 633 small and medium enterprises getting US$6.7 million and 412 large companies, US$35.1 million.

Offers ranged from $100 to $126 to the greenback.

Today’s auction was the last for the year and the next auction will be in four weeks.

A total of US$1.97 billion was allotted to businesses through the auction this year but the government has been complaining about the abuse of the facility by some companies which obtain foreign currency from the auction but go on to charge  for their goods and services using the black market rate thus fueling inflation.

The black market rate is currently between $160 and $180 against the United States dollar.

Inflation for November was 58.4%. It had gone down from a peak of  837.5% in July 2020 to 50.2% in August but started rising ostensibly because businesses were now sourcing foreign currency from the black market because of the backlog at the auction which was reported to have peaked at about US$200 million.

The central bank says it has now cleared the backlog.

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