Zimbabwe dollar falls by 4 cents

Zimbabwe dollar falls by 4 cents

The Zimbabwe dollar today fell by four cents to average $81.71 at today’s foreign currency auction down from $81.67 last week.

A total of US$29.7 million was allotted to 175 bids in the Small and Medium Enterprises auction and 256 in the main auction.

The gap between the highest and lowest offers remained almost static at $86 and $79 at the SME auction but widened at the main auction with the highest offer going up to $90 while the lowest remained at $80.

The foreign currency auction is widely credited with bringing stability to the country and even the Old Mutual Implied Rate, now renamed the Optional Market Implied Rate, has fallen to $99.68 today the highest since the mid-May.

But industry shares different views on the forex auction according to the online business publication, NewZwire.

Here are their views:

Nampak: OK, but not yet enough

The country’s biggest packaging company says the auction has helped, but forex shortages remain. “Foreign exchange shortages were alleviated to a large extent, by the introduction of the foreign exchange auction system where the official exchange rate between the US dollar and the Zimbabwe dollar has stabilised at about ZWL$81 to USD1. Despite this, the allocated foreign exchange is insufficient to meet all the imported raw material requirements needed to facilitate efficient production schedules,” Nampak says. “Despite some alleviation as mentioned above, the foreign exchange shortage remained the Group’s main concern.”

Innscor: ‘Extremely encouraging’, drought still in play

Innscor, the country’s biggest food manufacturer, says: “The introduction of the foreign currency auction system and Statutory Instrument 185 of 2020 allowed for the implementation of precise pricing strategies, enhanced planning capability, improved capital allocation and value preservation for the Group’s business units; these policy measures are extremely encouraging.”

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